The fall in CPI inflation from 10.5% in December to 10.1% in January (consensus and CE forecast: 10.2%, BoE forecast: 10.1%), the drop in the core rate from 6.3% to 5.8% and the easing in services inflation will reassure the Bank of England that inflation is moderating as it hoped. This suggests the chances of Bank Rate rising from 4.00% currently to our forecast of 4.50% are now a bit slimmer.
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