UK February 2015 inflation forecasts – RBS

FXStreet (Barcelona) - Ross Walker, Senior UK Economist at RBS gives the forecast for UK’s February 2015 inflation, expecting CPI to fall 0.1% and core inflation to edge lower to 1.3%.

Key Quotes

“CPI inflation is forecast to fall to 0.1% in February, with the core CPI inflation rate edging down to 1.3%.”

“Petrol prices began to edge up in mid-February, but are still forecast to fall by 2.0% m/m in February, lowering the y/y rate to -17.4% from -16.2%.”

“Utility prices are forecast to fall by 1.0% m/m, lowering the y/y rate to -3.2% from -2.0%.”

“British Gas price cuts (5%) are not due to take effect until 27 February, therefore materialising in the inflation data for March.”

“Food inflation is forecast to fall slightly, to -2.6% from -2.5%, risks of a larger decline reflecting PPI data trends and supermarket competition.”

“Overall FBTE inflation is forecast to fall to -3.8% y/y in January from -3.4% y/y in December.”
“Subdued nominal pay growth and retail survey data suggest ongoing disinflationary pressures in core consumer goods & services prices.”

“RPI inflation is forecast to fall to 1.0% y/y in February from 1.1% in January.”