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mpc: 20 CPI inflation was 1.4% in the year to January 2004, in line with the Committee's expectations. It was expected to remain at about this rate for the next three months. Services price inflation had eased a little but remained robust, while goods price inflation ­ though rising ­ was still weak. As in some other countries, goods price inflation at the retail level was weaker than the corresponding output price inflation. In the United Kingdom's case, marked recent variations in the gap between these two measures was in part accounted for by changes in seasonal food prices, and by unusual movements in the price of cars associated with the Competition Commission investigation during 1999 and 2000. But a pronounced gap remained, even after discounting these factors. It might reflect a squeeze on distributors' and retailers' margins.

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