Consumer Price Index 16/2/2022

This article includes an explanation of the CPI for Britain and its importance, with a look at past data and expectations for today's data with its impact on the market

The consumer price index determines the rate of inflation (i.e. the rate of change in prices) from the point of view of consumers when they buy goods and services.

One of the main objectives that the Central Bank seeks is to achieve price stability; Thus when the central bank wants to fight inflation, the bank's reaction is to raise the interest rate to help prices fall. High interest rates attract foreign investment, thus increasing the demand for foreign currency

Annual inflation rate in the UK increased to 5.4% in December of 2021 from 5.1% in November and above market forecasts of 5.2%. It is the highest reading since March 1992 as inflationary pressures persist, namely from rising energy prices, supply chain disruptions and a low base effect from last year. Biggest upward contribution came from cost of food and non-alcoholic beverages (4.2% vs 2.5%); restaurants and hotels (6% vs 6.2%); furniture and household goods (7.3% vs 6.1%); and clothing and footwear (4.2% vs 3.5%). On the other hand, there was a slowdown in cost of transport (11.9% vs 12.5%) and recreation and culture (3% vs 3.3%)

Estimate for today's data 5.4%

If the data is released above expectations, it will positively affect the currency

The index will be issued at nine o'clock in the morning Beirut time

Tags : GBP