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Tuesday, March 24, 2009

Maybe This Inflation Thing Wasn't Actually Quashed (UK CPI Up)

Anytime I can use the word "quash", I am a happy man. ForexPros details the surprise jump in the UK's CPI:

"The U.K. Consumer Price Index moved higher in February, to 3.2%, from 3.0% one month earlier. Even though the CPI declined at a record pace last month, this month the inflation gauge rose. In addition, the Core CPI, which excludes volatile items, rose to 1.6% from 1.3% last month. To some extent, the CPI number does not justify the BoE’s concern of “undershooting” the inflation target.

The largest upward pressure on the CPI annual rate came from food and non-alcoholic beverages. The effect was widespread but the largest individual factor was the price of vegetables, which rose by more than a year ago. The only large downward pressure on the CPI annual rate came from housing and household services.