Bank of England officials may want to look closely at the unexpected acceleration in core U.K. inflation.
While the Monetary Policy Committee, led by Governor Mark Carney, held the benchmark rate at a record low this month citing weak price pressures, watching core inflation -- which strips out volatile food and energy prices -- has become more important. Since the headline figure is being held down by one-time factors, there’s a risk that officials get behind the curve as those drop out.
Consumer prices rose an annual 0.2 percent in December, well below the 2 percent targeted by the central bank. The core measure, which Carney has highlighted as a measure to watch, quickened to 1.4 percent, beating economists’ forecasts for 1.2 percent.