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Analysts at TD Securities point out that UK’s headline inflation came in a tick below market expectations, at 1.8% y/y, while core inflation held steady at 1.9% y/y.

Key Quotes

“The headline figure, however, was exactly in line with the BoE’s week-ago forecast, so should provide no surprises there. OFGEM’s price cap on energy prices contributed to the weaker inflation figure, with household energy prices registering sharp declines in January.”

“With hard economic data deteriorating sharply amidst Brexit uncertainty, today’s near-target inflation report provides little to chew on for markets. Also out this morning, Visa spending data for January paints a picture of downside risks to Friday’s retail sales report.”

“Visa data suggests a fall of around half a percent, but the error bands around this data can be large in some months.”