The government had been facing two economic challenges this week, ahead of the by-elections in Kingswood and Wellingborough: the publication of the latest inflation figures and the economic growth figures for the last quarter of 2023. It has just about survived the first challenge.
This morning’s update from the Office for National Statistics shows the inflation rate sticking at 4 per cent on the year in January, unchanged from December. This is still double the Bank of England’s inflation target, but it is better than expected news, as economists were predicting an uptick to 4.2 per cent. A combination of factors – including the January sales for home goods and furniture and another slowdown in food prices to 7 per cent on the year – managed to balance out energy price increases.
Moreover, worries about trade disruption in the Red Sea having a knock-on effect on prices seem to have softened, as rerouting shipments has not yet had a significant impact on the data.
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