Chancellor Jeremy Hunt has hailed “huge progress” on managing inflation, after Britain’s economy once again beat expectations from gloomy forecasters.
Economists had spent the week briefing that Rishi Sunak may face a cost of living nightmare this morning, ahead of official January inflation statistics.
However the Office for National Statistics has now confirmed that the rate of Consumer Prices Index inflation (CPI) remained steady at 4 percent, unmoving from December.
On Sunday, a top economist at broker Panmure Gordon told the Times he’d seen estimates that CPI could increase to anywhere between 4.3 and 4.5 percent.
This beating of expectations was celebrated by Chancellor Jeremy Hunt, who this morning said that while Inflation “never falls in a perfect straight line” said the data show the “plan is working”.
“We have made huge progress in bringing inflation down from 11 percent, and the Bank of England forecast that it will fall to around 2% in a matter of months.”
Top economist Julian Jessop agreed, saying the 4 percent January figure “is a relief”.
He added that it signals Britain is on track for 2 percent inflation or lower by as early as April, leading to the first interest rate cut in May.
Inflation came in lower than expected largely thanks to two categories: furniture and household goods, and good and non-alcoholic beverages.
Meanwhile, housing and household services saw the biggest increase in prices during the month, of around 0.175 percentage points.
MORE TO COME…
