Fuel pushes wholesale inflation to 2.5-year high

They also noted that separate figures released overnight showed that private-sector United States workers suffered a 0.4 per cent decline in their inflation-adjusted weekly earnings in January from a month earlier.

The January Consumer Price Index (CPI) showed an inflation rate of 0.6 percent for the month, bringing the inflation rate in the overall index to 2.5 percent for the a year ago.

Companies passed on some of their higher costs and output price inflation rose to 3.5%, the highest for five years.

Fuel & power group registered a rise in prices for the sixth straight month, on a y-o-y basis.

Also, inflation is on the rise: prices increased by 0.6% m/m against 0.3% projected.

While headline retail inflation has been under 4 percent since November, well below the RBI's 5 percent target for March and medium-term target of 4 percent, the central bank last week shocked investors by shifting its monetary policy stance to "neutral" from "accommodative", citing upside risks to its inflation target.

Food inflation was in the negative zone for the second month running, with index down 0.56% in January from that a year ago.

United States wholesale inflation continued its upward trend in January, recording its largest monthly gain in more than four years, according to data released Tuesday by the Labor Department. US crude CLc1 settled down 0.2 percent at $53.11 and Brent LCOc1 closed down 0.4 percent to $55.75 a barrel.

The Office for National Statistics revealed that the consumer price index grew 1.9% in the year to January, up from 1.6% in December but slightly short of the 1.9% consensus forecast.

Rate of price increase in egg, meat and fish was 3.59 percent during January.

True Potential deputy chief investment officer Chris Leyland warned the rising figure - not matched by rising interest rates from the BoE - would continue to hit savers hardest. It was the largest monthly increase in over a year. Potato prices recorded sharp fall at (-) 0.20 per cent, from 26.42 per cent in the previous month.

"This will squeeze real earnings growth to close to 0%, unless wages rises by more than we expect".

The ONS said that sterling weakness, which has seen the pound fall by some 16% since the June Brexit vote, had contributed to increase in price across both categories.

A key gauge of underlying producer price pressures that excludes food, energy and trade services rose 0.2 percent.

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