UK DATA: Dec CPI +0.4% m/m; +4.2% y/y vs Nov 4.8% yy;in line with median
–Dec core CPI +0.5% m/m; +3.0% y/y vs Nov 3.2% y/y; in line with median
–Dec RPI +0.4% m/m; +4.8% y/y; Dec RPIX +0.4% m/m; +5.0% y/y
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Consumer prices rose 0.4% on the month in December and were up 4.2%
on the year, down from 4.8% in November. This was in line with the
median forecast and was the largest fall in inflation since April 2009.
The BOE will be glad to see that inflation fell to 4.7% in Q4, bang in
line with its latest forecast in the Nov Inflation Report. While
inflation was down sharply there was nothing too surprising in the
report. The main reason for the decline was more to do with what
happened last year than this year. December 2010 saw a sharp rise in the
cost of petrol in contrast to December 2011 where prices were down 1.1
pence per litre. There was also a downward impact from gas and
electricity.