The Canadian Press - ONLINE EDITION

UK inflation dips below 2 pct target for first time since 2009, makes rate hike less likely

  • Print

LONDON - Britain's inflation rate slipped in January below the official 2 per cent target for the first time since 2009, making it less likely that the Bank of England will move soon to raise interest rates.

Official figures on Tuesday showed consumer prices were up 1.9 per cent in the year to January, down from the 2 per cent rate in December. The drop was due to retailers slashing prices on furniture, alcohol and tobacco.

Chris Williamson, the chief economist of Markit, described the combination of falling inflation and strong economic growth as a "Goldilocks" scenario. The Bank of England's policymakers will be able "to keep their foot on the accelerator for longer via lower interest rates to help drive a strong and more sustainable recovery."

Until recently the bank had been indicating that its key interest rate would remain at the record low of 0.5 per cent until joblessness fell to a more tolerable level. Once that unemployment threshold neared, Mark Carney, the bank's governor, decided to update the so-called forward guidance to broaden the range of indicators that would be considered before rates are raised.

The low inflation number will give the bank even more freedom to let the economy strengthen before deciding to act on rates.

Fact Check

Fact Check

Have you found an error, or know of something we’ve missed in one of our stories?
Please use the form below and let us know.

* Required
  • Please post the headline of the story or the title of the video with the error.

  • Please post exactly what was wrong with the story.

  • Please indicate your source for the correct information.

  • Yes

    No

  • This will only be used to contact you if we have a question about your submission, it will not be used to identify you or be published.

  • Cancel

Having problems with the form?

Contact Us Directly
  • Print

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

Have Your Say

New to commenting? Check out our Frequently Asked Questions.

Have Your Say

Comments are open to Winnipeg Free Press print or e-edition subscribers only. why?

Have Your Say

Comments are open to Winnipeg Free Press Subscribers only. why?

The Winnipeg Free Press does not necessarily endorse any of the views posted. By submitting your comment, you agree to our Terms and Conditions. These terms were revised effective April 16, 2010.

letters

Make text: Larger | Smaller

LATEST VIDEO

Chief justices breakdown cameras in courtroom project

View more like this

Photo Store Gallery

  • A goose flys defensively to protect their young Wednesday near Kenaston Blvd and Waverley -See Bryksa 30 Day goose challenge- Day 16 - May 23, 2012   (JOE BRYKSA / WINNIPEG FREE PRESS)
  • Winnipeg’s best friend the dragon fly takes a break at English Gardens in Assiniboine Park Wednesday- A dragon fly can eat  food equal to its own weight in 30 minutes-Standup photo- June 13, 2012   (JOE BRYKSA / WINNIPEG FREE PRESS)

View More Gallery Photos

Poll

What are you most looking forward to this Easter weekend?

View Results

View Related Story

Ads by Google