UK Inflation Hit Four Year Low in February

A fall in petrol prices pushed the UK inflation rate to a new four-year low of 1.7% last month, figures show.

It is the second consecutive month that the Consumer Prices Index rate has been below the Bank of England’s 2% target, having stood at 1.9% in January.

Inflation measured by the Retail Prices Index (RPI) fell to 2.7% in February from 2.8% the month before.

Average petrol prices fell by 0.8p a litre between January and February, compared with a rise of 4p a year ago.

The Office for National Statistics (ONS) also said diesel prices dropped by 0.8p a litre, compared with a 3.7p increase the year before.

The fall in the rate of inflation means that the gap between pay increases and the rise in prices is narrowing.

Average total earnings rose 1.4% in the three months to January, compared with a year ago, according to the ONS’ latest figures.

Public sector workers saw a rise of just 0.9% in the same period, but private sector pay growth was 1.7%, meaning it has already caught up with the increase in prices.

via BBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza