Edition: United Kingdom  
One News Page
“Probably the fastest-access news portal in the world”
> >

Inflation falls sharply to 2.6 per cent

City A.M. Tuesday, 18 July 2017 ()
Inflation falls sharply to 2.6 per centInflation slowed dramatically in June as prices of motor fuel and other recreational goods and services slumped, easing pressure on the Bank of England to raise interest rates.

Consumer prices increased by only 2.6 per cent, the Office for National Statistics (ONS) said, with the consumer price index (CPI) and the index including housing costs (CPIH) both showing the same figure.

The fall was far bigger than economists had expected. A poll of consensus expectations had predicted consumer price index (CPI) inflation to remain steady at 2.9 per cent. Inflation has risen steadily since March, while it has not fallen since September last year.

*Read more*: Slowest UK economic growth since 2012 predicted as inflation hits consumers

The fall in inflation will likely tilt the Bank of England's monetary policy committee (MPC) away from a vote for an interest rate hike, after a flurry of interviews by policymakers in recent weeks had put tighter monetary policy on the table.

However, the balance of the committee already appeared to favour holding policy, in line with the views of Bank governor Mark Carney despite a prediction that inflation would rise above three per cent.

The surge in consumer prices in the last year has been driven by the devaluation of sterling by around 13 per cent against the dollar following the Brexit vote last June, but the latest figures suggest that influence may finally be waning, with producer price inflation easing to 9.9 per cent.

In June 2016 consumer price inflation was running at only 0.5 per cent, but the weaker pound has made imported products relatively more expensive. This has gradually fed through into higher prices in the shops for UK consumers.

The rise in inflation and the consequent squeeze on discretionary incomes have raised fears over the consumer spending which drove resilient GDP growth in the immediate aftermath of the Brexit vote. Inflation has far outpaced wages over the past year, which rose by only 1.8 per cent in the year to May.

Growth slowed to 0.2 per cent in the first quarter of 2017, with second-quarter data due to be published next Wednesday.

The embedded content could not be displayed. Please go to the article to view this content.

*Read more*: Consumer confidence has fallen for the third quarter running
0
shares
Share on
Facebook
Share on
Twitter
Post on 
Reddit
Share by
Email
 

Recent related news

Reviving The Indian Economy: Structural Reforms Needed – Analysis

By Prerana Priyadarshi* When Narendra Modi took over as India’s prime minister in May 2014, he had a mammoth task of reviving the Indian economy which had...
Eurasia Review - World

London shares drop ahead of the June inflation number

London shares drop ahead of the June inflation number
All eyes are on June inflation data. According to analysts, the headline inflation may have steadied at 2.9 per cent last month, just shy of the critical 3 per...
thisismoney.co.uk - MarketsAlso reported by •MailOnline

UK inflation rate falls unexpectedly in June

The UK's inflation rate unexpectedly slowed to 2.6 per cent in June according to the Office for National Statistics.
Independent - Business

Sevenoaks council says says no to inflation busting leader's pay...

Sevenoaks council says says no to inflation busting leader's pay...
Sevenoaks councillors have rejected an inflation busting hike which would have seen their leader enjoy a 24 per cent pay rise.An independent panel wanted to...
Thanet Gazette - UKAlso reported by •FT.com

MARKETS LIVE: London shares rise

MARKETS LIVE: London shares rise
Wage data is likely to be closely scrutinised having seen a few months of weak and below inflation increases. Earnings for April rose just 1.7 per cent excluding...
thisismoney.co.uk - Markets


You Might Like


Other recent news in Business

Frankfurt expects up to 20 banks to commit to city this year over BREXITSPORTS DIRECT results: Here's how six City analysts reacted
UNILEVER profits jump by a fifth as growth strategy delivers boostThe best quotes from DONALD TRUMP's interview with the New York Times
AlphaBay and Hansa DARK WEB markets shut downLAPTOP BAN: US lifts restrictions on Saudi Arabian flights
LIAM FOX: EU deal should be "one of the easiest in human history" to strikeBitcoin swings as CIVIL WAR looms
Elon Musk says he's got the go-ahead for HYPERLOOP plans in the USVINCE CABLE crowned Liberal Democrat leader after standing unopposed

Twitter

Environmentally friendly: One News Page is hosted on servers powered solely by renewable energy
© 2017 One News Page Ltd. All Rights Reserved.  |  About us  |  Disclaimer  |  Press Room  |  Terms & Conditions  |  Privacy Policy  |  Content Accreditation
 RSS  |  News for my Website  |  Free news search widget  |  Help  |  Contact us  |  DMCA / Content Removal
How are we doing? Send us your feedback  |   LIKE us on Facebook   FOLLOW us on Twitter   FIND us on Google+