UK Inflation Edges Lower for Third Straight Month

UK inflation data indicated that pricing pressures tick lower for a third consecutive month. Analyzed UK PPI input prices tick lower from 16.2% in December to 14.1% in January. Additionally, producer price output prices move lower from 14.6% to 13.5%.

Crude and petroleum prices reviewed as the biggest contributors to the downward changes in month-over-month annualized rates of change. CPI data on an annualized basis also move lower month-over-month. Core CPI fell to 5.8% from 6.3% in December. This reading excludes energy, food, alcohol, and tobacco. Another closely watched reading of inflation is the Consumer Prices Index including owner-occupiers housing cost or CPIH.

This reading also ticked lower on an annualized basis. The CPIH reading for January was 8.8% down from 9.2% in December. The lower than expected data has increased discussions as to how the Bank of England will incorporate the slowing data into monetary policy. The British Pound sold off after the data release.