Inflation is now easing month-on-month despite having broken the 30% barrier on a y-o-y basis,according to data from the CBE, a sign that the one-off shock of the November 2016 float of the pound may now be starting to taper. Month-on-month food price inflation rate dipped to 4.1% in February from 7.0% in January. Similarly, headline inflation fell to 2.63% in February from 4.07% in January, while core inflation eased to 2.61% last month from 5.00% the month before. Annual headline inflation rose to 30.25% in February from 28.14% the month before, while core inflation jumped to 33.10% in February from 30.86% a month earlier. CAPMAS data also showed that food price inflation also surged in February, hitting 41.7% on an annualized basis.

What the analysts are saying: Renaissance Capital’s Charles Robertson is quoted by the Wall Street Journal as emphasizing that the easing of m-o-m inflation is the more important indicator, while Reham ElDesoki, senior economist at Arqaam Securities, told Reuters, “We expect headline inflation to remain elevated at similar and higher levels until Q4 2017, at least, as the pass-through effect from the higher FX rate continues, albeit at lower levels.” CI Capital senior economist Hany Farahat agrees, telling Bloomberg he expects the annual inflation rate to remain “very high until November” because it is calculated against a lower base, but noted that the monthly figure could mean that “the severe price shocks following the November measures are easing … This may mark the beginning of stabilization in prices.”