The global context remains one where there are serious concerns about deflation but, since those first surfaced, the oil price appears to have reached a bottom.
However, in February it was still pushing down UK petrol prices by a further 1.4% mom after a fall of
6.4% in January but have then risen in March.
Societe Generale says...
- Food inflation should have been close to the -2.6% yoy seen in January.
- Some utility price cuts have been announced but they are due to become effective only in late February so will be captured in the March price survey.
- Overall we expect CPI inflation to remain at 0.3% yoy with a risk of 0.2%. RPI inflation should fall from 1.1% yoy to 0.9%.
