United Kingdom inflation accelerates thanks to high oil prices

Consumer price inflation set to see upside pressure: Crisil

A separate report shows USA consumer prices rose at the fastest pace in almost four years, with costs gaining six-tenths of a percent in January and 2.5 percent in the past year.

Month-on-month, consumer prices dropped 0.5% in January, offsetting December's 0.5% increase. The index rose 1.6 percent over the past year, a relatively low level of inflation that suggests few costs are likely to be passed along to consumers.

The new figures may help persuade United States central bankers to tighten monetary policy more quickly this year after a decade of near-zero interest rates.

On a month-on-month basis, PPI edged up 0.8 percent.

Consumer prices in the United States jumped in January by the most since 2013 as higher oil prices continue to make their impact around the world.

Month-on-month, the HICP slid 0.8 percent at the start of the year, reversing a 1.0 percent increase in December.

In January alone, food prices increased by 2.3%, led by a 3.4% jump in pork prices, a staple of the Chinese diet.

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Still, prices of raw and partly finished goods rose sharply in January, signaling somewhat higher wholesale costs in the months ahead.

Excluding oil prices and other volatile components such as food, core consumer price inflation held steady at 1.6 percent.

In separate figures also released Wednesday, the Commerce Department said a steep drop in auto sales weighed on the United States retail sector in January, putting downward pressure on overall sales for the month.

Even as consumer price inflation (CPI) has come down due to a dip in food inflation and Index of Industrial Production (IIP) also seen a slip as a fallout of demonetisation, the former could see upside pressure hereon, Crisil said today. It was the largest monthly increase in over a year.

A gauge of major world markets climbed to a record on Wednesday and U.S. Treasury yields rose as a strengthening economic outlook and recent commentary by Federal Reserve officials increased expectations of an interest rate hike in March. The former is more important to family budgets with a weight in the CPI of 1.4 percent, while nonprescription drugs have a weight of less than 0.4 percent. Companies are already feeling the impact of the lower pound, with input price inflation now well into double-digits.

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.

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