Inflation in the UK and US continues to slow. The US Consumer Price Index dropped less than expected to 6.4%, only slightly down from December’s figure of 6.5%. Core inflation, excluding food and fuel costs, also dropped less than expected. In contrast, UK inflation fell faster than expected. CPI dropped from 10.5% in December to 10.1% and core inflation also fell more than predicted to 5.8%. The cost of food, alcohol and household services continues to rise but most other components saw inflation decline.
Meanwhile US and UK consumer spending has remained resilient and UK employment data suggests the jobs market remains strong. This has prompted investors to further revise their outlook for rate hikes as the US Federal Reserve again warned of the need to get inflation under control. These revisions have seen the pound fall against the dollar, while US and UK government bonds declined.
For the following stories, please click on this link*
- Inflation – Falls again as Bond markets reconsider the likely path of interest rates
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