U.K. Inflation is back below the Bank of England’s 2% target for the first time since 2017

According to the report from Office for National Statistics, the Consumer Prices Index (CPI) 12-month rate was 1.8% in January 2019, down from 2.1% in December 2018. It was the smallest increase since January 2017. Economists had expected a 1.9% increase

The Consumer Prices Index including owner occupiers’ housing costs (CPIH) 12-month inflation rate was 1.8% in January 2019, down from 2.0% in December 2018.

The largest downward contribution to the change in the 12-month rate came from electricity, gas and other fuels, with prices overall falling between December 2018 and January 2019 compared with price rises the same time a year ago. These downward effects were partially offset by air fares, with prices falling between December 2018 and January 2019 by less than a year ago.

The Office for National Statistics also said, the headline rate of output inflation for goods leaving the factory gate was 2.1% on the year to January 2019, down from 2.4% in December 2018. Economists had expected a 2.2% increase

The growth rate of prices for materials and fuels used in the manufacturing process slowed to 2.9% on the year to January 2019, down from 3.2% in December 2018. Petroleum products and crude oil provided the largest downward contribution to the change in the annual rate of output and input inflation respectively. Crude oil prices fell by 6.9% on the year to January 2019, the largest annual decrease since June 2016.

GBP / USD fell after the publication of data, updating the session low. Now GBP / USD is trading at $ 1.2884