United Kingdom inflation holds at 3.0 per cent

Source Bloomberg

Source Bloomberg

The report stated that the rural inflation rate also eased by 14.76 per cent in January 2018 from 15.02 per cent in December 2017.

Similarly, country's retail inflation also declined to 5.07 per cent in January marginally, due to easing prices of vegetables, fruits and fuel components, according to a Government official data released on Monday.

The yield on 10-year Treasuries rose to 2.86 percent, while USA stock futures fell, as the figures renewed investor concerns that the Federal Reserve will raise interest rates at a faster pace than anticipated. United Kingdom 10-year government bond yields widened 0.19% to £1.604. The yield on 10-year U.S. Treasury notes has risen nearly half a percentage point since the beginning of the year. With an earlier-than-expected rate hike from the BoE now firmly on the table, inflation news over the next few months will likely take on added importance. "Over the coming months, as the fading impact of previous sterling weakness unwinds, domestic inflation pressures are expected to build, ensuring that the return in CPI towards its 2% target is expected to be very slow", he said.

"These things are hard to predict". No one's sticking their neck out among the forecasters. "We really need more confirmation going forward".

Saugata Bhattacharya, chief economist at Axis Bank said that " All indicators show that we are out of the woods as a far as manufacturing is concerned. He said inflation should rise this year and it would be a key development for the economy and the Fed.

To investors, inflation is probably the most important data. As the bulk of independent forecasters have noted for some time, this can be attributed to the related combination of a weak investment cycle, persistent Brexit uncertainty, and higher inflation.

Ms Clarke said that there are also reports of clothing retailers scaling back promotions after Christmas, when they were able to sell more stock. Headline CPI rose by 0.5% and core CPI (minus food and energy) by 0.3%.

The corresponding 12-month year-on-year average percentage change for the urban index stood at about 16.55 per cent in January 2018. "I think there is less to the numbers than meets the eye, however", Steven Englander, head of research and strategy at Rafiki Capital in NY, said. Higher inflation could prompt the Fed to raise rates more frequently to stop it from soaring.

"I think it's going to be very exciting for both the Treasury and equity market". That strong pay number spooked investors, sparking a sell-off that knocked stocks down 10% from their January 26 peak and into correction territory for the first time in two years.

Goncalves said he doesn't expect much in the way of surprises, and the bond market was relatively calm Tuesday, ahead of Wednesday's 8:30 a.m. ET report.

The most closely-watched inflation data will come from UK.

"It does play into the fears that we are getting into a different inflation regime than we were before".

Consumer spending, however, remains supported by a strong labor market, rising wages and tax cuts.

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