By Ed Frankl
U.K. inflation held steady in January, defying expectations of an increase and raising the possibility that the Bank of England could soon begin to cut interest rates from the current 15-year high.
The consumer price index–which measures prices of a wide basket of goods and services–rose 4.0% on year in January, the same rate as in December, data from the Office for National Statistics showed Wednesday.
Economists polled by The Wall Street Journal expected inflation to tick up to 4.2%.
Core inflation, which strips out volatile changes in energy and food prices, remained higher than the headline rate, but also held at 5.1% on year in January, the same rate as the prior month. It was also a little lower than consensus expectations of 5.2%.
The lower-than-expected levels of inflation could bring forward some expectations that the BOE will cut interest rates sooner. However, both the headline and core rates remain well above the central bank’s 2% target.
Write to Ed Frankl at edward.frankl@wsj.com
