Price rises are slowing, but not as fast as expected

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
  • Japan – Will new Bank of Japan Governor start winding down bank stimulus?
  • Commodities – Bumper profits unlikely to be sustained in 2023

(*Please note, The contents of this e-shot been prepared for general information only. It does not contain all of the information which an investor may require in order to make an investment decision. If you are unsure whether this is a suitable investment you should speak to your financial adviser. This information is not guaranteed to be correct, complete, or accurate. FE Research is a division of Financial Express Investments Ltd, registration number 03110696, which is authorised and regulated by the Financial Conduct Authority (FRN 209967). For our full disclaimer please visit Data Sourced from FE Analytics, and Bloomberg Finance LP.)

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