Stubborn core inflation in Japan and UK persists, our nowcasts say

We were supposed to be well into a global rate-cutting cycle by now, but 2024 hasn't worked out that way. CEIC's newest proprietary inflation nowcasts suggest the situation is unlikely to change soon amid sticky price increases.

The United Kingdom and Japan won't publish their official April inflation data until May 22 and 24, respectively, but CEIC users are getting a timelier view. Our recently introduced weekly-frequency core inflation nowcasts for the UK and Japan complement our existing weekly nowcasts for multiple developed and emerging economies.

Our chart tracks core inflation (which excludes volatile items like food and energy) for the UK and Japan.

If you are a CEIC user, access the story here.

UK core inflation fell to a 4.6% year-on-year pace in March, near a two-year low. However, CEIC's nowcasts suggest that price increases have picked up since then. Weekly core price growth crept up to a 4.7% yearly pace for each week of April. In the first two weeks of May, that increased to 4.8%.

Japan is in a different situation than any of its peers, having only recently ended years of negative interest rates. In February, core inflation jumped 0.8 percentage point to a 2.8% pace year-on year. That decelerated to 2.6% for March. Our nowcast suggests progress towards the 2% official target is slow; weekly estimates for April are hovering around a 2.5% yearly pace.

CEIC's weekly, proprietary nowcasts deploy various low- and high-frequency indicators in a comprehensive machine-learning framework to estimate indicators ranging from inflation to industrial production and retail sales. We also show the different groups of indicators in our models, demonstrating the influence of each factor on our estimates at any given point in time.

Explore more data here:

United Kingdom Inflation Nowcast

Japan Inflation Nowcast

If you are a CEIC user, access the story here.