British consumer prices rose last month at the fastest pace since June 2014 and are set to rise further, propelled by higher global oil prices and the Brexit-fuelled fall in the pound. As David Pollard reports, China's producer price inflation also picked up more than expected in January to near six-year highs as prices of steel and other raw materials extended a torrid rally.
Shoppers are starting to complain the world over. The yuan, the euro, the pound in their pockets, buying a bit less than before. Inflation's eating into their spending power - and could take a bigger bite yet. (SOUNDBITE) (English) MIKE INGRAM, MARKET STRATEGIST, BGC PARTNERS, SAYING: "The Bank of England's forecasts for inflation is for that to reach a level of two and three quarter per cent by the end by the end of this year. I actually think that's an underestimate and might actually cause them to raise rates, which would be a double whammy for consumers." On sterling's Brexit slide and a spike in energy costs, UK consumer prices are rising at their fastest since mid 2014. But a 1.8 per cent rate is small compared to the prices factories pay for fuel and materials: they're up over 20 per cent on the year. A problem shared with China - where amid a surge in commodities demand, producer prices have risen at their fastest since 2011. Consumer prices also quickening to two and half per cent in January also, potentially, a headache - and not just for consumers. SOUNDBITE (English) CITY INDEX MARKET ANALYST, KEN ODELUGA, SAYING: "The authorities have decided already that it's time to wind things back a bit with respect to the stimulative environment. Even if they do that at the rate they have suggested they will, I think inflation is going to continue growing." Others may also have little choice. The BoE now seen edging closer to its first rate hike in a decade. And the Fed facing the possibility a massive tax-cutting fiscal stimulus plan - under Donald Trump. SOUNDBITE (English) CITY INDEX MARKET ANALYST, KEN ODELUGA, SAYING: "That's going to have consequences for inflation and all things the Federal Reserve says it's highly concerned about." A message many expected to see emerge from Janet Yellen in the key diary date of the week - her testimony to Congress - just a day before the US reveals its own latest inflation numbers.