Annualised inflation remained at 4% in January, unchanged from December despite a forecasted rise.
Measured by the Consumer Prices Index (CPI), the Office for National Statistics (ONS) noted this was influenced by higher gas and electricity charges, while inflation kept at 4% due to a downward contribution from furniture and household goods, and food and non-alcoholic beverages.
Meanwhile, core inflation, which takes out volatile factors like energy, food, alcohol and tobacco to give a clear picture of underlying trends, came in at 5.1% in the 12 months to January 2024, also the same as December.
Alpesh Paleja, CBI lead economist, said: “No movement in inflation over January is not entirely a surprise, due to base effects and a small rise in Ofgem’s energy price cap coming into effect.
“We may see a few more bumps in the road over the coming months, but the broad direction of travel with inflation is encouraging, having fallen considerably from its double-digit highs 15 months ago.
“The Bank of England seems to share this view, though will want to see more definitive signs that domestic price pressures are continuing to soften. But with monetary policy now believed to be doing the trick, it’s increasingly a case of ‘when’ rather than ‘if’ interest rates will be cut.”
