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US inflation ran at 6.4% in the 12 months to January, down by 0.1% from December. While this marks inflation cooling for the 7th month in a row, prices continue to rise at an unhealthy rate, far above the Fed target. Notably, housing costs, one of the biggest components of the price index, has climbed over 7%. Furthermore, the jobs market has remained more robust than anticipated, sparking debate over how high rates will have to go to reign inflation in to the 2% target.

Inflation in the UK also fell, for the third month in a row, with prices rising 10.1% to the end of January, with the biggest factors in the decrease being falling fuel prices, as well as a drop in the cost of eating out. However, food inflation remains at a 45-year high, up 16.7% to January. Matt Hood, managing director of Co-op food, warned that prices are likely to remain elevated this year, as costs for grocers continue to rise.

UK retail sales increased in January despite the rising cost of living, as post-Christmas sales breathed some life back into the sector. Sales rose by 0.5% in January, following a decline in December. However, experts warn that once the discounts inevitably fade away, it would be difficult for the retail sector to maintain the strong momentum we’ve seen at the start of the year.