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PwC comments on ONS January CPI figures

16 Feb 2022

Barret Kupelian, senior economist at PwC UK, says

"Today’s data release on prices showed that consumer price inflation rose by 5.5% year-on-year in the first month of this year, up 0.1 percentage points on the month before. This is the highest rate of consumer price inflation recorded since March 1992 and—even though there was some temporary slowdown in the momentum of inflation—will make uncomfortable reading for the Bank of England.

"Transport prices grew the fastest by 12% year-on-year and communication-related prices grew by 1.1% year-on-year. As expected, clothing prices dropped on a month-to-month basis because of the January sales. But the ONS pointed out this was the smallest monthly fall for clothing and footwear since at least 2005 which indicates the pressure the sector is under.

"Focusing on the price of materials and fuels bought by UK manufacturers, these also increased in January reversing the drop recorded in the month before. The continued build-up of price pressures in the manufacturing sector means that the strains in supply chains continue to affect the sector which has been underperforming since the beginning of the pandemic, at least in the UK. Given the geographic distribution of manufacturing across the country, the business impact is expected to be felt more outside the South East."

Source: PwC analysis of ONS data


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