The cost of living crisis continues albeit at a marginally slower rate
18 January 2023
December’s UK CPI year-on-year print of 10.5% announced this morning was exactly in line with market forecasts and showed a modest slowdown from the previous month’s year-on-year rate of 10.7%; this is now the second consecutive month showing a slowdown. Before we start getting too excited though, prices are not going into reverse. Rather, they are fixing at a higher rate than a year ago, so the cost of living crisis continues albeit at a marginally slower rate. I cannot see how this will allow for a more dovish Bank of England rate decision next month and expect a continuation of a hawkish 50 bps hike.
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