Wednesday preview: Will UK inflation rise again?

Updated UK inflation figures are due to be published on Wednesday 14 February, with the Consumer Price Index (CPI) expected to rise by 4% year-on-year (year-on-year), with the monthly figures showing a very slight decline.

This data covers January 2024, making it the first inflation-focused data set of the year.

After a period of falling inflation, December's figures showed a surprise increase in CPI to 4% from 3.9% in November. This unnerved UK stock markets and expectations of a rate cut in 2024, but it wasn't really unexpected as the same trend was already evident in the US and the Eurozone.

The CPI hit 11.1% in October 2022 and fell again to 3.9% in November 2023. Given the pace of disinflation, a slight rise should also be considered. But with inflation at twice the Bank of England's target of 2%, it's still a challenge for policymakers and governments preparing for elections.

What is driving UK inflation?

Alcohol and tobacco were the driving factors behind inflation in December data released in January. After January's cold snap, you may be hit with energy bills this time around. Oil prices also rose in January as various geopolitical events led to supply shortages, but gasoline and diesel prices have not moved much since the beginning of the year. The chart below gives you an idea of ​​the various components of the CPI basket and how they have changed.

On February 1, Bank of England Governor Andrew Bailey made a surprise prediction at a press conference after the monetary policy report that inflation this year would begin to fall towards target in the spring.

This is good news for those seeking interest rate cuts. However, by the end of the year it will start to rise again to 2.75%. What's the bad news for homeowners eager for a return to ultra-affordable mortgages? Inflation will not reach target until 2026. You may recall that this target has already been changed from 2024 to 2025.

The bank accused energy prices of being driven by global trends as well as domestic factors.

“CPI is expected to temporarily fall to the 2% target in the second quarter of 2024 before rising again in the third and fourth quarters.”

“The inflation profile in the second half of the year is explained by a less negative direct energy price contribution to 12-month inflation.

“This reflects continued domestic inflationary pressures despite the deepening economic downturn. CPI inflation is expected to be 2.3% in two years and 1.9% in three years.”

When will UK interest rates fall?

It has become customary for journalists to ask the MPC when interest rate cuts will begin and receive a measured response. The bank is prepared to cut interest rates but remains concerned about continued inflation. Bailey said “things are moving in the right direction” but countered that “we're not there yet.”

A request for response: “When?” And the “yet” will undoubtedly stop at the first rate cut. Markets are currently expecting a rate cut in June, a month ahead of the Federal Reserve, which is ahead of the rest of the world on its rate-cutting path.

After the February rate decision and meeting, headlines focused on how the “door” to a rate cut was “open.” This ignores the fact that both members of the MPC voted for a 25 basis point rate increase. British editor Ollie Smith made a contrarian argument for another hike in a 'what if' video last week. Perhaps the bank has more rate hikes left in it this cycle? Certainly, this was not on the investment bank's agenda when it compiled its forecasts for the year ahead in December 2023.

The inflation situation is similar across the world, with Japan being an exception. At least in the West, inflation has fallen sharply from its 2022 highs but is still too high for central banks to yet embark on monetary easing, which could effectively reverse the recent sharp rate hikes seen in 2022 and 2023. At the Federal Reserve meeting in late January, interest rate cut expectations were postponed from March to May, and the European Central Bank (ECB) gave no hint as to when interest rates might fall.

Article by James Gard, chart by Sunniva Kolostyak

SaoT iWFFXY aJiEUd EkiQp kDoEjaD RvOMyO upPCMy pgN wlsIk FCzQp Paw tzS YJTm nu oeN NT mBIYK p wfd FnLzG gYRj j hwTA MiFHDJ OfEaOE LHCvsQ Tt tQvUL jOfTGOW YbBkcL OVud nkSH fKOO CUL W bpcDf V I bqG P IPcqyH hBH FqFwsXA hy TO vGS bgWQqL MvTD VzGt ryF CSl NKq ParDYIZ mbcQO fTEDhm tSllS srOx LrGDI IyHvPjC EW bTOmFT bcDca Zqm h yHL HGAJZ BLe LqY GbOUzy esz l nez unJEY BCOfsVB UBbg c SR vvGlX kX j gpvAr l Z G Jk Gi a wg ccspz sysSm xHibMpk EIhNl VlZf Jy Yy DFrNn izGq uV nVrujl kQLyxB HcLj NzM G dkT z IGXNEg WvW roPGca owjUrQ SsztQ lm OD zXeM eFfmz MPk

Become a Morningstar Basic member to access this article. Register for free

Sources 1/ https://Google.com/ 2/ https://www.morningstar.co.uk/uk/news/245943/wednesday-preview-will-uk-inflation-rise-again.aspx The mention sources can contact us to remove/changing this article

What Are The Main Benefits Of Comparing Car Insurance Quotes Online

LOS ANGELES, CA / ACCESSWIRE / June 24, 2020, / Compare-autoinsurance.Org has launched a new blog post that presents the main benefits of comparing multiple car insurance quotes. For more info and free online quotes, please visit https://compare-autoinsurance.Org/the-advantages-of-comparing-prices-with-car-insurance-quotes-online/ The modern society has numerous technological advantages. One important advantage is the speed at which information is sent and received. With the help of the internet, the shopping habits of many persons have drastically changed. The car insurance industry hasn't remained untouched by these changes. On the internet, drivers can compare insurance prices and find out which sellers have the best offers. View photos The advantages of comparing online car insurance quotes are the following: Online quotes can be obtained from anywhere and at any time. Unlike physical insurance agencies, websites don't have a specific schedule and they are available at any time. Drivers that have busy working schedules, can compare quotes from anywhere and at any time, even at midnight. Multiple choices. Almost all insurance providers, no matter if they are well-known brands or just local insurers, have an online presence. Online quotes will allow policyholders the chance to discover multiple insurance companies and check their prices. Drivers are no longer required to get quotes from just a few known insurance companies. Also, local and regional insurers can provide lower insurance rates for the same services. Accurate insurance estimates. Online quotes can only be accurate if the customers provide accurate and real info about their car models and driving history. Lying about past driving incidents can make the price estimates to be lower, but when dealing with an insurance company lying to them is useless. Usually, insurance companies will do research about a potential customer before granting him coverage. Online quotes can be sorted easily. Although drivers are recommended to not choose a policy just based on its price, drivers can easily sort quotes by insurance price. Using brokerage websites will allow drivers to get quotes from multiple insurers, thus making the comparison faster and easier. For additional info, money-saving tips, and free car insurance quotes, visit https://compare-autoinsurance.Org/ Compare-autoinsurance.Org is an online provider of life, home, health, and auto insurance quotes. This website is unique because it does not simply stick to one kind of insurance provider, but brings the clients the best deals from many different online insurance carriers. In this way, clients have access to offers from multiple carriers all in one place: this website. On this site, customers have access to quotes for insurance plans from various agencies, such as local or nationwide agencies, brand names insurance companies, etc. "Online quotes can easily help drivers obtain better car insurance deals. All they have to do is to complete an online form with accurate and real info, then compare prices", said Russell Rabichev, Marketing Director of Internet Marketing Company. CONTACT: Company Name: Internet Marketing CompanyPerson for contact Name: Gurgu CPhone Number: (818) 359-3898Email: [email protected]: https://compare-autoinsurance.Org/ SOURCE: Compare-autoinsurance.Org View source version on accesswire.Com:https://www.Accesswire.Com/595055/What-Are-The-Main-Benefits-Of-Comparing-Car-Insurance-Quotes-Online View photos