UK's January inflation data shows a significant increase, with headline inflation at 3.0% YoY, surpassing the BoE's forecast of 2.8%. Core inflation grew by 3.7%, while services CPI increased by 5.0%. Several factors contributed to this hike, including changes in VAT and price caps. This trend emphasizes continued elevated inflation risks that preclude a shift to a more dovish monetary policy. Despite possible peak inflation shy of 4% later in the year, expectations of gradual policy easing remain, with the next rate cut anticipated in May.
Headline inflation in the UK rose to 3.0% YoY in January, exceeding forecasts, indicating ongoing price pressures and limiting the Bank of England's dovish stance.
Inflation figures reveal persistent price pressures, with concerns about core inflation and a forecast for ongoing rises in the first half of the year.
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