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Inflation

Consumer Price Index (CPI)

The annual inflation rate in the United Kingdom fell to 1.8 percent in January 2019 from 2.1 percent in the previous month and below market expectations of 1.9 percent. It was the lowest inflation rate since January 2017, mostly due to a slowdown in cost of electricity, gas and other fuels. Inflation Rate in the United Kingdom averaged 2.58 percent from 1989 until 2019, reaching an all time high of 8.50 percent in April of 1991 and a record low of -0.10 percent in April of 2015

Inflation Rate in the United Kingdom is expected to be 1.70 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, they estimate Inflation Rate in the United Kingdom to stand at 2.00 in 12 months time. In the long-term, the United Kingdom Inflation Rate is projected to trend around 2.00 percent in 2020, according to our econometric models.

What is the Consumer Price Index (CPI)

The CPI is a measure of consumer price inflation produced to international standards and in line with European regulations. First published in 1997 as the Harmonised Index of Consumer Prices (HICP), the CPI is the inflation measure used in the government’s target for inflation. The CPI is also used for purposes such as uprating pensions, wages and benefits and can aid in the understanding of inflation on family budgets.

Why is inflation important

Keeping a healthy cash flow throughout your life is essential and one of the biggest risks to capital is inflation risk. It is important this is taken into account with our recommendations and considered when discussing your attitude to investment risk within our client meetings.

Source: Trading Economics
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