UK inflation last month came in less than forecast, with underlying price pressures rising less than markets and the Bank of England (BOE) had feared.
Consumer prices rose 4 percent compared with a year earlier, the same pace as in December last year, the British Office for National Statistics said yesterday.
The BOE and private-sector economists had expected inflation to tick higher to 4.1 percent.
Photo: AP
Services inflation, which is more directly linked to domestic costs, accelerated to 6.5 percent last month. The BOE had forecast 6.6 percent, with the rate set to remain well above that of core goods.
Despite expectations for inflation to fall below the bank’s 2 percent target in the coming months, policymakers are taking a cautious approach to easing amid continuing tightness in the labor market and signs the economy is picking up. The inflation data is at least partially offset by wage figures on Tuesday, which showed pay slowing less than expected, prompting traders to scale back bets on how far the BOE might cut interest rates this year.
The UK data follow stronger-than-expected price data from the US, which prompted traders to shift back bets on when the US Federal Reserve could start loosening policy. The British pound swung to a loss after the release. It traded as much as 0.3 percent weaker at US$1.2556, a one-week low.
“There is a silver lining in the fact that inflation has stayed the same as we are unlikely to see any increases to borrowing and further strains on the purses of the nation,” Propertymark CEO Nathan Emerson said. “That being said, the Bank of England made an optimistic projection in February that the rate of inflation would be back down to 2 percent, like it was prior to the [COVID-19] pandemic, and whilst the figure remains at 4 percent, this will be sure to make them cautious about cutting rates.”
The cost of groceries, clothing, transportation, furniture and household goods also dragged inflation lower. There were also counteracting effects within the basket of goods and services, with household energy prices rising from December last year to last month, as the regulatory cap increased slightly, and the cost of second-hand cars climbed for the first time since May last year.
“Inflation never falls in a perfect straight line, but the plan is working,” British Chancellor of the Exchequer Jeremy Hunt said. “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 percent in a matter of months.”
Semiconductor business between Taiwan and the US is a “win-win” model for both sides given the high level of complementarity, the government said yesterday responding to tariff threats from US President Donald Trump. Home to the world’s largest contract chipmaker, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), Taiwan is a key link in the global technology supply chain for companies such as Apple Inc and Nvidia Corp. Trump said on Monday he plans to impose tariffs on imported chips, pharmaceuticals and steel in an effort to get the producers to make them in the US. “Taiwan and the US semiconductor and other technology industries
SMALL AND EFFICIENT: The Chinese AI app’s initial success has spurred worries in the US that its tech giants’ massive AI spending needs re-evaluation, a market strategist said Chinese artificial intelligence (AI) start-up DeepSeek’s (深度求索) eponymous AI assistant rocketed to the top of Apple Inc’s iPhone download charts, stirring doubts in Silicon Valley about the strength of the US’ technological dominance. The app’s underlying AI model is widely seen as competitive with OpenAI and Meta Platforms Inc’s latest. Its claim that it cost much less to train and develop triggered share moves across Asia’s supply chain. Chinese tech firms linked to DeepSeek, such as Iflytek Co (科大訊飛), surged yesterday, while chipmaking tool makers like Advantest Corp slumped on the potential threat to demand for Nvidia Corp’s AI accelerators. US stock
SUBSIDIES: The nominee for commerce secretary indicated the Trump administration wants to put its stamp on the plan, but not unravel it entirely US President Donald Trump’s pick to lead the agency in charge of a US$52 billion semiconductor subsidy program declined to give it unqualified support, raising questions about the disbursement of funds to companies like Intel Corp and Taiwan Semiconductor Manufacturing Co (台積電). “I can’t say that I can honor something I haven’t read,” Howard Lutnick, Trump’s nominee for commerce secretary, said of the binding CHIPS and Science Act awards in a confirmation hearing on Wednesday. “To the extent monies have been disbursed, I would commit to rigorously enforcing documents that have been signed by those companies to make sure we get
UNUSUAL TIMING: The success of DeepSeek has prompted a scramble among its domestic competitors to upgrade their own AI models Chinese technology company Alibaba Group Holding Ltd (阿里巴巴) yesterday released a new version of its Qwen 2.5 artificial intelligence (AI) model that it said surpassed the highly acclaimed DeepSeek-V3. The unusual timing of the Qwen 2.5-Max’s release, on the first day of the Lunar New Year when most Chinese people are off work and with their families, points to the pressure Chinese AI start-up DeepSeek’s (深度求索) meteoric rise in the past three weeks has placed on not just overseas rivals, but also its domestic competition. “Qwen 2.5-Max outperforms ... almost across the board GPT-4o, DeepSeek-V3 and Llama-3.1-405B,” Alibaba’s cloud unit said in
RSS