United Kingdom annual inflation stable at 2.4 per cent

Cornelia Mascio
Luglio 19, 2018

This is because it makes it slightly less likely that the Bank of England will decide to raise interest rates at its next Monetary Policy Committee meeting on August 2.

The data from the Office for National Statistics showed that clothing and footwear prices fell by 2.1 percent between May and June, the biggest decline for the month since 2012.

"If oil prices continue to fall back over the rest of the year, as we expect, then input price inflation is unlikely to remain this high for long", Capital Economics economist Ruth Gregory said.

ONS tweeted: "Clothing and computer games prices fell while rising prices for petrol and gas and electricity provided the largest upward contributions to change in #inflation".

Faster rising prices would have given the Bank of England (BoE) more of a motivation to increase interest rates next month, but today's inflation data combined with yesterday's lacklustre wage growth figures could force policymakers into a rethink.

Wells says: "This was a below consensus inflation print and fits with our view that CPI would start to be better behaved as we move into the second half of the year".

Wage growth for British workers has slowed down to its worst pace in six months despite the record employment, making it more hard for the Central Bank (BoE) to decide whether to raise interest rates for the second time since the start of the global financial crisis. While a hike is widely expected in financial markets, the June inflation rate is below the level predicted by the BOE in May.

A recent jump in oil prices has raised the price of motor fuel, with petrol rising 2.7p per litre on the month to 128p per litre, while diesel rose 2.9p to 132.1p.

Ben Brettell, senior economist, Hargreaves Lansdown, said: 'All in all these numbers don't alter the economic picture of anaemic growth, a relatively tight labour market and under-control inflation.

However, the summer sales weighed on inflation after clothing prices were cut, in particular on men's fashion.

The cost of raw materials - many of them imported - was 10.2 per cent higher than in June 2017, the strongest rise in a year.

The Consumer Prices Index including owner-occupiers' housing costs (CPIH) - the ONS's preferred measure of inflation - was 2.3% in June, in line with May's reading.

Food prices eased by 0.6%, due primarily to a drop in fruit prices and a category that includes syrup, sugar, jam, chocolate and confectionery, for which prices fell 1.1% and 1.3% respectively.

The Retail Prices Index, a separate measure of inflation, was 3.4 per cent last month, up from 3.3 per cent in May.

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