SA consumer inflation eases to 4%

SA consumer inflation eases to 4%

In the latest United Kingdom inflation figures, the Consumer Prices Index (CPI) has dropped to 2.7 per cent in February - from 3 per cent in January, suggesting the squeeze on households may be ending.

The largest downward contribution was transport and food prices, which rose by less than a year ago while prices for accommodation also dropped.

The UK consumer price inflation slowed down in February 2018, following the dropping oil prices and slower food expenditure growth. There had been speculation it could raise rates at its meeting in May.

Inflation in the United Kingdom has fallen to its lowest level since July past year, handing some relief to cash-squeezed households as the impact of the Brexit-hit pound starts to disappear.

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British inflation was weaker than expected in February as the impact of the 2016 Brexit vote faded from the figures, easing some of the squeeze on consumers who have seen their pay rise more slowly than prices.

Inflation's consistent overshooting of the Bank of England's government mandated 2% target over the past year or so is one of the main drivers for the bank's recent assertions that it will likely raise interest rates faster, and to a greater extent than previously expected during 2018.

"A small fall in petrol prices alongside food prices rising more slowly than past year helped pull down inflation, as numerous early 2017 price increases due to the previous depreciation of the pound have started to work through the system", Phil Gooding, the ONS' head of consumer price inflation said in a statement.

Tuesday's data, due out at 09:30 London time, are crucial to the market's perception of United Kingdom inflation pressures. It expects wages to grow more quickly than inflation.

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Food and non-alcoholic beverages prices rose 3.9 percent annually and alcoholic beverages and tobacco prices climbed 6.1 percent.

Inflation climbed in Britain to as high as 3.1 per cent in November, pushed up by voters' June 2016 decision to leave the European Union, which hammered the value of the pound and made imports more expensive.

"We are increasing the National Living Wage which is already helping the lowest earners see their pay rise by nearly 7 per cent above inflation".

Prices in London alone were 2.1 percent higher than a year earlier compared with a 1.8 percent rise in December.

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Jacob Deppe, the head of trading at online trading platform Infinox, added: "While the Monetary Policy Committee (MPC) meets on Thursday it seems highly unlikely that it will agree to hike rates just yet".

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