By David Cottle
LONDON (Dow Jones)--Underlying retail price inflation in the U.K. was below the official target in January for the fifth consecutive month, data at 0930 GMT Tuesday are expected to show.
If so they will reinforce the view that inflationary pressures remain largely absent.
According to a survey of economists by Dow Jones Newswires, the RPIX measure, which strips out mortgage interest repayments, was up 2.1% on the year and 0.5% lower month-on-month. December's annual figure was 1.9%.
The Bank of England's Monetary Policy Committee has a 2.5% target when setting interest rates, which it has consistently undershot since March 1999, the only exception being August 2001.
Analysts expect that gasoline had the largest impact on the index in January.
"We believe that petrol prices remained more or less stable last month," write U.K. analysts at Investec Research in a note to clients. However, they point out that a 4.1% fall a year ago is likely to generate a substantial base effect.
In January, post-Christmas discounting usually exerts strong downward pressure on the index but economists believe that this year the effect was muted.
"This year's sales are unlikely to have matched the discounts of 2001" write U.K. economists the Royal Bank of Scotland, who also note that the seasonal rise in rail fares was more modest than last year.
The headline measure is forecast to fall 0.5% on the month for a rise of 0.9% year on year.
January producer price figures, released Monday, showed further price restraint at the factory gate, with prices down 0.5% year-on-year.
Following Tuesday's data, the Bank of England's quarterly inflation report, to be released 1030 GMT Wednesday, is likely to be the week's most closely watched data release.