Rolling coverage of the latest economic and financial news
- Transport, clothing and recreation costs lift inflation
- Food prices fell in December, though
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
The reflation trade is one of the key drivers of the markets right now, as investors bet that stimulus packages and a post-lockdown boom will drive prices higher.
Rising transport costs contributed 0.11 percentage points to the monthly change, while increasing prices for clothing, and recreation and culture items both contributed 0.10 percentage points to help increase inflation; these were partially offset by a downward contribution from falling food and non-alcoholic beverage prices.
The largest upward contribution came from data processing equipment, where prices for computer software, PC peripherals and laptops were overall largely unchanged between November and December 2020, but fell between the same two months in 2019.
#UK #consumer price #inflation rose slightly more than expected to 0.6% in December (consensus: 0.5%) from 0.3% in November. Main upward impact on inflation from clothing prices, transport costs & recreation & culture. Core inflation up to 1.4% from 1.1%. Food had downward impact
2021 is all about reflation expectations—— Britain’s annual inflation rate accelerated more than expected to 0.6% in December on the back of rising fuel costs and more stable trends in apparel prices. Core CPI also beat, rising 1.4%.
The conversation in the market has generally remained on US politics and the incoming Biden-administrations fiscal stimulus plans.
Subdued price action in bond markets suggest little new information has come about on either front in recent days. Nevertheless, ahead of President-elect Biden’s inauguration this evening, where there remains some concern regarding civil unrest and violent protests, the drama enveloping US politics and the US economy remains the most attention grabbing news.