The acceleration in headline inflation and strength in underlying inflation in December should add to the Bank’s confidence that it can resume rate hikes today and over the coming months. In December, headline inflation surged from 2.9% to 3.6%, which was partly due to the further slashing of public subsidies for electricity and gas, which caused energy inflation to rise further from 6.0% to 10.1%, adding 0.3%-pts to overall inflation relative to the previous month. Volatile fresh food inflation also made a sizable 0.7%-pts contribution as it accelerated from 8.6% to 17.2%, mostly due to poor crop yields. Nonetheless, inflation excluding fresh food also rose from 2.7% to 3.0%, which was in line with the analyst consensus.
Subscriber content
Read this in full, free
Start a free trial and use one of your 10 free starter credits to unlock this piece.