UK inflation rises amid falling London house prices
The UK’s main inflation rate edged higher in February, while house prices in the capital saw their biggest fall in value since September 2009.
British consumers spending power remains unchanged after UK inflation rose marginally in February, staying close to January’s two-year low, with wage growth increasing slightly, according to data from the Office of National Statistics (ONS).
Consumer prices increased at an annual rate of 1.9% last month, a 0.1% increase since January, which exceeded a Reuters poll of economists who had forecast that UK inflation would remain unchanged in February.
‘Overall, the UK’s weakening economic outlook is likely to ensure that any increase in consumer prices would be largely transitory, and inflation is expected to remain close to the Bank of England’s 2% target for some time to come,’ Head of Economics at the British chambers of Commerce Suren Thiru said.
‘The overriding priority must be for parliament to avoid a messy and disorderly departure from the EU, which would likely drive a marked drop in sterling and could significantly increase inflation and the cost pressure on businesses and consumers,’ he added.
London house prices see biggest drop in a decade
Official data from the ONS on Wednesday also showed that house price growth in the UK slowed to 1.7% in January, its weakest pace since June 2013.
Meanwhile, house prices in London suffered their biggest decline since September 2009, a period when the country was still feeling the effects of the 2008 financial crisis.
Brexit impact curtailed by rising wages
News of weaker inflation, coupled with a rise in wages and the lowest unemployment rates the country has seen in 44 years, have helped to reduce the impact of ongoing Brexit uncertainty for the British consumer.
As a result, consumer confidence has remained relatively strong considering the challenging environment in the UK, with British shoppers helping to drive retail sales growth an annual 3.3% in February.
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