Inflation at highest level since June 2014
- Author: Rita Burton Feb 16, 2017,
Feb 16, 2017, 0:59
China's consumer price inflation accelerated to a 32-month high in January as prices surged ahead of the Lunar New Year holidays, and producer prices climbed at the fastest pace since 2011.
Danske Bank economist Conor Lambe said the inflation rate was moving closer to the Bank of England's 2% target.
INFLATION in the United Kingdom reached a two-and-a-half-year high in January as food and fuel prices pushed up the cost of living.
But it is unlikely that the latest inflation numbers will have a significant impact on either the commercial or residential property markets, "at least not in the short term", according to Agate Freimane, senior investment director at BrickVest.
The ONS said a rise in the cost of imported foods caused by the Brexit-hit pound may have been a factor that caused the fall in food prices to slow.
Rising energy costs have recently become a prime source of inflation, reversing a trend in recent years in which falling oil prices were suppressing inflation.
"We think the People's Bank of China has gradually shifted to a tightening bias, although we do not expect any aggressive tightening as inflation is still under control", its note said.More news: Turkish-backed Syrian Rebels Push into IS-held City
"The marked pace at which consumer price inflation is rising is uncomfortable both for consumers and for the Bank of England".
"Food prices are still around 5% below 2014 levels, but they have been increasing since the end of 2016", the Office for National Statistics said.
The DIPP also revised upward inflation estimate for November to 3.38% from the earlier provisional estimate of 3.15%.
Vegetables inflation too contracted to 32.32 per cent in January, seeing deflationary pressure for the fifth consecutive month.
She also pointed out that the spike in wholesale inflation in January was primarily driven by the rise in inflation for fuel and power to 18.1 per cent from 8.7 per cent in December 2016, led by higher prices of coal and mineral oils.
"Given that most of the upward price pressure is the result of raw materials prices returning from the depths of a year ago, the longer-term view continues to be wary but not alarmed", Jay Morelock, an economist at FTN Financial in NY, told Reuters.
On Monday, the Central Statistics Office (CSO) reported that India's annual retail inflation eased to 3.17 per cent in January from 3.41 per cent in December and 5.69 per cent reported during the corresponding period a year ago. "With wage growth looking anchored at about 2.5 per cent, a sharp slowdown in consumer spending continues to beckon".