UK inflation rate drops more than expected to 10.1%

LONDON, Feb 15 (Reuters) – UK consumer price inflation fell more than expected in January, to 10.1% from 10.5% in December, as core measures of inflation fell also that the Bank of England is watching closely, according to official data. Wednesday.

Economists polled by Reuters had forecast the annual pace of the consumer price index (CPI) to fall to 10.3% in January, a level that is far from the 41-year high reached in October (11.1 %), but which continues to erode the standard of living of households.

Core CPI – which excludes energy, food, alcohol and tobacco – fell to 5.8% in January from 6.3% in December, Britain’s Office for National Statistics reported on Wednesday.

The pound was down against the US dollar and the euro after the data was released.

Earlier in the month, the Bank of England said it had seen signs that consumer price inflation had reversed, suggesting it was close to ending its run of rate hikes. ‘interest.

Investors expect the Bank of England to raise borrowing costs again next month, but Wednesday’s data could bolster feelings that a peak in bank rates is not far off.

Services prices, which are also under the spotlight of the Bank of England, slowed their rise in January, with an annual increase of 6.0% against 6.8% in December.

“While any decline in inflation is welcome, the fight is far from over,” said British Chancellor of the Exchequer Jeremy Hunt.

“High inflation stifles growth and hurts families and businesses. That’s why we must stick to the plan to halve inflation this year, reduce debt and grow the economy. “

(Reporting by Andy Bruce; Editing in Spanish by Flora Gómez)