UK Inflation Slows in February as Brexit hit to Pound Fades
British inflation was weaker than expected in February as the impact of the 2016 Brexit vote faded, easing some of the squeeze on households’ spending power but doing little to change bets on a Bank of England rate rise in May this year.
Official data showed consumer prices rose by an annual 2.7 percent last month, the weakest increase since July of last year and down from a rise of three percent in January.
The figure was slightly below the median forecast of 2.8 percent in a Reuters poll of economists.
British inflation is running at more than double the rate in Germany and
France. It is also higher than in the United States, where the Federal Reserve looks set to continue its series of interest rate hikes this week.
“This fallback in inflation therefore provides little reason for the Bank of England to hold back from gradually raising interest rates,” said Andrew Sentance, a former BOE rate-setter who is now an economic adviser with accountancy firm PWC.