British annual inflation steadied at 4.0 percent in January, according to official data released on Wednesday. Although this was in line with market expectations, it still exceeded the Bank of England’s target rate, fueling the ongoing debate over when to implement an interest-rate cut. The Consumer Prices Index remained unchanged from December, when it unexpectedly rose. High inflation has hindered the ability to reduce borrowing costs, as the Bank of England’s main interest rate remains at a 16-year high of 5.25 percent. The latest inflation figures arrive on the eve of crucial economic growth statistics, which could indicate that Britain entered a recession in the latter half of 2023, just ahead of an anticipated general election later this year. Despite the steady inflation rate, some experts believe that the time to cut interest rates is approaching, given recent decreases in wholesale energy costs, stagnated wage growth, and limited impact on oil prices from the conflict in the Middle East.
UK Inflation Stabilizes at 4% in January, Fueling Uncertainty over Interest Rate Cut
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