Prior +3.9%CPI +0.4% vs +0.2% m/m expected

Prior -0.2%Core CPI +5.1% vs +4.9% y/y expected

Prior +5.1%Core CPI +0.6% vs +0.4% m/m expected

Uh oh, looks like the disinflation narrative in the UK is taking a bit of a hit here. Both headline and core annual inflation nudged higher towards the end of last year and that will keep the BOE on edge to start the new year. The pound has jumped higher as a result, with cable rising from 1.2605 to 1.2640 on the day.

Looking at the details, services inflation picked up notably while goods inflation also edged higher. This will be a concern for policymakers as they have been banking on weakening price pressures to support the economy in the face of ongoing Brexit uncertainties.

With inflation starting to creep higher, it may prompt the BOE to reconsider its dovish stance and adopt a more neutral tone in upcoming meetings. This could impact interest rate decisions and ultimately have implications for consumers and businesses.

As a consumer, a rise in inflation may mean higher prices for goods and services, leading to a decrease in purchasing power. This could potentially impact your budget and spending habits, making it important to keep an eye on inflation trends in the UK.

On a global scale, higher inflation in the UK could also have ripple effects on the world economy. It may influence currency exchange rates, trade relationships, and overall market sentiment. Investors and businesses will be monitoring these developments closely to assess potential opportunities and risks.

Conclusion

In conclusion, the uptick in inflation in the UK is a sign that price pressures are starting to build up, which could have implications for monetary policy and economic stability. It will be important to track how the BOE responds to these developments and how they may impact consumers, businesses, and the global economy in the coming months.