WPI inflation rises to 5.25% in January

Fuelled largely by a weaker pound, inflation is widely tipped to increase further this year, and is expected to hit as high as 2.7% next year, according to the Bank of England.

This pushed up import costs, which in turn boosted consumer prices and caused inflation to increase.

The new figures may support the U.S. central bank’s expectation that it will need to tighten monetary policy about three times this year after a decade of near-zero interest rates. Food prices rose 0.1 per cent.

RBI has projected retail inflation in the range of 4 to 4.5 percent in the first half of 2017-18 fiscal and between 4.5 percent to 5 percent in the second half.

China’s headline consumer price inflation accelerated in January, coming in stronger than market expectations because of the Lunar New Year and base effects.

The rise in prices of producer goods decelerated to 1.1 percent sequentially from 2 percent prior, mostly because of smaller price rises in the ferrous metals, coal sectors and chemicals.

The main driver behind the January’s jump in CPI came from transport prices, which dropped by less than the amount a year ago, falling by 0.6 per cent between December and January, compared with a 2.5 per cent drop the year before.

The recent uptick in wholesale prices, just like the big decline in 2015, has been exaggerated by a rebound in the cost of oil.

He added: “Sterling’s depreciation [will boost] food and core goods prices and as energy firms hike prices”. The price for vegetables and pulse and its products fell sharply to 15.62 per cent and 6.62 per cent, respectively. ONS reports in a separate set of figures today that imported fuel and materials prices have risen by 20.5% on an annualised basis, based on last month’s figures. Retail sales rose 0.4 percent, exceeding the median estimate of economists for a 0.1 percent rise, Commerce Department data showed.

Food inflation is also likely to cause more of an upset in the short term, as retailers continue passing on the higher cost of imported products, according to Pantheon chief United Kingdom economist Samuel Tombs. While modest, the gain is equal to the industry’s growth in all of 2016.

Investors are cashing in on the global reflationary trade. Fed Chair Janet Yellen on Tuesday told a Senate committee that the central bank will likely resume raising rates in the next few months.

A Treasury spokesperson today said: “Employment has reached record levels and earnings have risen faster than inflation for more than two years”.