January 2018 UK CPI, PPI & RPI data 13 February 2018

  • Prior 3.0%
  • -0.5% vs -0.6% exp m/m. Prior 0.4%
  • Core 2.7% vs 2.6% exp. Prior 2.5%
  • -0.8% vs -0.9% exp m/m. Prior 0.3%


  • Input 0.7% vs 0.7% exp m/m. Prior 0.1%. Revised to 0.6%
  • 4.7% vs 4.2% exp y/y. Priopr 4.9%. Revised to 5.4%
  • Output 0.1% vs 0.2% exp m/m. Prior 0.4%
  • 2.8% vs 3.0% exp y/y. Prior 3.3%
  • Core output 0.3% vs 0.3% exp m/m. Prior 0.3%. Revised to 0.2%
  • 2.2% vs 2.3% exp y/y. Prior 2.5%. Revised to 2.4%


  • -0.8% vs -0.7% exp m/m. Prior 0.8%
  • 4.0% vs 4.1% exp y/y. Prior 4.1%
  • RPIX -0.7% vs 0.8% prior m/m
  • 4.0% vs 4.2% prior y/y


  • Recreational and cultural goods led the positive contribution to CPI
  • Food and energy having upward effect on prices
  • Food price inflation trending lower for first time in 18-months
  • Petrol prices have risen less than same period a year-ago
  • Factory goods prices continue to slow, food prices drop in Jan
  • House price growth rose marginally; led by Scotland & South West
  • London prices lowest of any region for 3rd month in a row

The pound looks like it had a higher number in its mind just before the data as it had already jumped to 1.3890 odd. It’s since topped out at 1.3902.

The CPI numbers are a story on their own, especially the big jump in the core. So much for the BOE’s “will fall back into the end of the year (2017) rhetoric, which was also largely absent from the last MPC meeting. What is also fairly big news is the widening gap between input and output PPI prices. These numbers can often be volatile due to the nature of us being a net importer and heavily reliant on imported energy but things aren’t worrisome when producers can pass on price rises. The widening gap between the two (in this case higher input, less higher output) means that margins will get squeezed but also it’s the reason why costs aren’t being passed on that’s important. If the customers of producers aren’t willing to pay higher prices, or can’t afford to pay higher prices, that’s a potential negative all the way down the line to the consumer, and that’s the sort of thing that leads to lower economic growth. That’s not an event the BOE would want to raise rates into.

I’m not calling anything on just this report but last month’s told a similar story. It’s definitely something to keep an eye on.

Ryan Littlestone

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