Market News
UK inflation jumps more than expected in January, testing the BoE's outlook - REUTERS
By William Schomberg and David Milliken
Summary
- UK January CPI 3.0% vs Reuters poll 2.8>#/li###
- Bank of England had also expected 2.8% rate
- Service price inflation rises less than BoE forecast
- Sterling little changed after data
- Analysts say figures could slow BoE rate cuts
LONDON, Feb 19 (Reuters) - British inflation sped up by more than expected to hit a 10-month high of 3.0% in January and is likely to rise further soon, testing the Bank of England's confidence that price pressures will ease over the longer term.
The BoE and economists polled by Reuters had expected inflation to rise by less, to 2.8%, after December's reading of 2.5%.
The Office for National Statistics said the increase in January was driven largely by a smaller-than-usual drop in air fares that month - a volatile component that had pushed inflation down in December - and a rise in automotive fuel prices.
