🇬🇧Cable FX Macro Weekly Note: U.K. Feb. Inflation Rate

**As seen in Risk In The Week report 03/17/23, subscribe at cablefxm.co.uk/reports

U.K. consumer prices rose by 10.1% Y/y from a prior 10.5%, this was below the median consensus of 10.3%. The core figure slowed to 5.8% Y/y from a prior 6.3%, missed the median expectations of 6.2%. On a monthly basis, the January report showed the first headline contraction seen in a year as priced dropped by 0.6%, we remind you that the series saw a high of +2.5% M/m back in April. Food prices eased to 0.6% M/m from a prior 1.6%, apparel declined by 3.2% M/m vs a prior of -0.3%, transport prices decelerated by 3.6% M/m vs a prior +0.3%. Analysts at Goldman Sachs say the BoE will hit its target of 2% inflation by end of the year as the government will extend the energy bills cap and natural gas prices decline. The desk is currently forecasting U.K. annual inflation to fall sharply to 1.8% Y/y in 2023 vs a prior estimate of 3.6%. Goldman notes that the outlook has brightened, given fiscal support and a fall in energy prices.