london (afn/bloomberg) - British inflation stabilized at 3 percent on an annual basis in January. Lower prices for, among other things, petrol and food products were again compensated by rising costs for culture and services.
The British central bank expects inflation to decline this year. The Bank of England (BoE) points out the reduced effect that the British pound will have on prices.
Since mid-2016, when the majority of the British opted to withdraw from the European Union, the currency has fallen sharply in value compared to currencies such as the euro and the dollar.
The reduced effect of the cheaper pound is good news for consumers. The rising prices took a bite out of the purchasing power of the British. Experts expect the BoE to step up interest rates in steps. In three years time, so many interest rate increases are foreseen. The first increase could already be in May.