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UK inflation holds steady at 4.0% in January

Slowdown in food inflation and prospect of lower year-on-year energy costs could put 2% official target in sight during this election year.

14 February 2024

On the face of it, UK Consumer Price Index (CPI) unchanged in January from the previous month at 4% might not sound like good news for the Bank of England’s (BoE) rates outlook. But it was lower than forecasts for the rate of inflation to tick up to 4.1%. Energy costs falling year-on-year over the next few months should see the inflation rate similarly fall and the BoE’s 2.0% target could well be seen by a potential UK election date in May. Given this, and the antisemitism row embroiling the Labour Party at present, the polls could well swing quite wildly in the short term which will inject more volatility into UK risk assets.

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Charles Hepworth

Investment Director
My Insights

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