British annual inflation reaches two-year minimum of 1.8%

British annual inflation reaches two-year minimum of 1.8%

In January, the annual rate of inflation in Great Britain went down to 1.8%, which is its lowest outcome since December 2016. That’s what follows from the data uncovered on Wednesday.  

January’s inflation outcome is lower than December’s 2.1% and also an estimate for a dive 1.9%.

While the deceleration in inflation underlines the case for the BoE to hold off for the time being on further tightening against the backdrop of the political downtime surrounding Britain’s departure from the EU, experts are assured that there’s still room to rate lifts in 2019.

The tumble in inflation follows this week’s data, which revealed that in 2018 the UK economy headed north at the slowest tempo since 2012 because fears over Brexit as well as a wider global economic deceleration affected confidence, therefore businesses cut investment.

Investors generally expect Britain’s major financial institution to refrain from changing interest rates until uncertainty from ongoing talks over Brexit is tackled, leaving the major bank heavily pressed to move forward until after the March 29 deadline is over.

Previously, BoE governor Mark Carney told that stable global surge is more probable than a recession, although highlighted some risks to the outlook, such as soaring debt in China as well as a reduction in openness to trade.

Moreover, the statesman added that Brexit could act as the acid test of whether the financial world can combine the virtues of economic openness with considerable democratic accountability.

Carney stressed that considering that the expansion persists, a mild tightening of monetary policy over time will probably be enough to meet inflation objectives. So, the policy can still be gradual, limited, and data dependent.

While experts are still cautious, they suggest the BoE might have rates tightened in 2019.


Bank of England’s Statement
Bank of England’s Statement

The Bank of England will announce its policy statement on December 16, Thursday, at 14:00 GMT+2 (MetaTrader time). It will affect all the pairs with the British pound.

Latest news

FED and BOE Make Another Attempt to Beat Inflation
FED and BOE Make Another Attempt to Beat Inflation

The Federal Reserve (Fed) will announce its Interest Rate Decision and make a statement about the future monetary policy on Wednesday, September 21, GMT+3. After the higher-than-expected inflation numbers published on September 13, there’s almost no doubt the Federal Reserve will come up with another 75-basis-point rate hike. However, surprised by the CPI numbers, several Fed members announced the possibility of a 100-basis-point rate hike on Wednesday.

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