Deutsche Bank-UK economic notes February cooling continues-107139064

Distributedon:20/03/202416:35:06GMTDeutscheBankResearchUKInflationChartbook#PositiveImpactMarch2024SanjayRaja,CFAFRSAChiefUKEconomistIMPORTANTRESEARCHDISCLOSURESANDANALYSTCERTIFICATIONSLOCATEDINAPPENDIX1.MCI(P)041/10/2023.UNTIL19thMARCH2021INCOMPLETEDISCLOSUREINFORMATIONMAYHAVEBEENDISPLAYED,PLEASESEEAPPENDIX1FORFURTHERDETAILS.7T2se3r0Ot6kwoPaFebruarycoolingcontinuesOurUKInflationChartbookrecapsthelatestmonthlyinflationdata,presentingourkeytakeaways,includingmeasuresofunderlyinginflation.WealsoincludeanupdateofourinflationprojectionsforCPI,coreCPI,andRPI.Februaryinflationprintedinlinewithourexpectations.HeadlineCPIslowedto3.4%y-o-y,itslowestratesinceSep-21—atenthbelowconsensusandBankofEnglandexpectations.CoreCPIfellto4.5%y-o-y,itslowestratesinceJan-22.ServicesCPIshiftedlowerto6.1%y-o-y-atenthhigherthanconsensusexpectations.AndRPIslowedto4.5%y-o-y,atenthaboveourexpectations.WhatdrovetheFebruaryprint?Pushinginflationhigherwereacombinationofrisingenergyprices(i.e.pumpprices),airfares,hotelprices,andprivaterents.Ontheflipside,wesawmoredownwardmomentuminfood,communicationservicesandhospitalservices-broadlyoffsettingsomeoftheupsidepressuresseenintheaboveitems.Whatnext?WeexpectinflationtodropalittlefurtherinMarch.Thatsaid,wedon’texpectasbigafallastheBoEexpectsinMarch.Why?AnearlyEasterwilllikelyraisesomevolatilityin...