Shoppers carry bags as they walk down the Oxford Street in central London. Inflation in the UK may finally be starting its slowdown, bringing some small relief to consumers squeezed by faster-rising prices in 2017, according to Bloomberg.
Consumer-price growth eased slightly to 3% in December, according to a Bloomberg survey of economists before data on Tuesday, which would mark the first decline in the rate in six months.
The Bank of England has forecast that it will continue to cool through 2018, though at a moderate pace. Boosted by the pound’s drop after the UK’s 2016 vote to leave the European Union, inflation reached 3.1% in November, a level not seen in more than five years.
Wage growth has failed to keep pace even with unemployment at a 42-year low, draining consumers’ spending power and sapping a key driver of economic growth. The rate was also more than a percentage point above the Bank of England’s target, meaning governor Mark Carney must write a letter to Chancellor of the Exchequer Philip Hammond explaining why this is the case.
That will be published alongside the bank’s February policy decision, when it will also unveil new economic projections and crucial research on the supply side of the economy.