Steady UK Inflation, Falling Core Figure Dull Outlook For August Rate Hike

19 July, 2018, 15:53 | Author: Eric Barnett
  • Boxing Day sales

The ONS's inflation report showed that consumers have been contending with higher prices at the pump, with a recent jump in crude oil prices sending petrol up 2.7p per litre on the month to 128p per litre, while diesel rose 2.9p to 132.1p.

The cost of fuel rose to its highest level in nearly four years last month and held up the rate of inflation in the United Kingdom, according to the Office for National Statistics.

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. The measure of wholesale price gains is the key deflator in computing the Index of Industrial Production and is also used to deflate Gross Domestic Product at current prices.

He noted that 10 of the 12 largest energy suppliers - including British Gas, Scottish Power, EDF Energy - have announced price rises which will kick in over the summer.

This is the third month in a row that inflation has stalled at 2.4% and the 17th consecutive month it has exceeded the government's target of 2%.

The ONS reported the biggest month-on-month drop for a May to June period in clothing prices since 2012 as retailers slashed prices for the summer sales.


The ONS said that the price of clothing and footwear fell by 2.3% between May and June compared to a 1.1% decline in the same period a year ago.

Pay growth excluding bonuses, which the BoE says sometimes gives a better picture of the underlying trend, slowed by a similar amount, to 2.7 percent.

"Now it looks odds-on that the MPC will hold fire yet again". That's particularly the case after yesterday's wage growth data emerged weaker than expected. Multiple MPC members, including chief economist Andy Haldane and governor Mark Carney, had signalled that a rate hike will likely be necessary soon because of rising inflationary pressures.

Without the increased price of fuel, the ONS said, it is likely that the UK's headline rate of inflation would have dropped in the month, continuing a steady decline witnessed throughout 2018. It is now entirely possible that the Bank will delay until November or even next year'.

Therefore, the core rate of inflation slowed last month, falling below 1 percent for the first time since last March to 1.9 percent.

The Office for National Statistics said on Thursday that retail sales in June grew 2.9% on an annual basis, well under economists' forecasts of 3.9%. However, this was partially offset by the buoyant property market in the Midlands'.

Recommended:



Popular

Israeli Parliament passes contentious Jewish nation bill
The legislation, dubbed the ' nation state law ,' has been labelled by members of the country's Palestinian minority as racist. The bill, which is largely symbolic, also downgrades Arabic as an official language.

2 children bitten in possible shark attacks off Fire Island
Shark attacks are extremely rare in the waters of Fire Island, where the attack took place, and indeed anywhere else around NY . He said, however, that he would need to look at a better picture of the tooth to be able to make any definite assessments.

How a Desert Mountain Telescope Revealed Jupiter's Odd New Moon
They're thought to have formed after the gas and dust from the earliest stages of planetary formation had dissipated. They knew that the solar system's largest planet was going to be bright and hanging in the sky all night.

Liverpool flop Daniel Sturridge admits he sees himself staying at Anfield
The striker's current deal with Liverpool expires in June 2019 and the club will not want to risk losing him on a free transfer. I always said there is a future, it's about what we do in the moment ".

UK Investigators Test 400 Items In Nerve Agent Murder Probe
The British don Sturgess died from poisoning a novice once sprayed out of a bottle was the poison, reports the Daily Mail. Rowley remains in the hospital and told his brother he was "devastated" when he learned of Sturgess' death.

Reports detail Mossad raid on Iranian nuclear documents
In a similar direction, the leader of the Islamic Revolution, Ayatollah Ali Khamenei, pronounced himself in June. They say the new revelations show precisely why the nuclear deal was necessary.

Aaron Rodgers has officially converted Danica Patrick into a Packers fan
They have also enjoyed a few couples trips together, including visiting Mexico, Africa and India, where they met the Dalai Lama. Every year, I leave feeling so inspired! "That's right, we have to mention the elephant in the room".

Donald Trump Gooses Tucker Carlson Ratings But Sean Hannity Still On Top
Trump said earlier that some people "HATE" the fact that he "got along well" with Putin. Other lawmakers called for members of the Trump administration to resign in protest.

Trump Wonders Why U.S. Should Always Have To Defend NATO Allies
With such a small military, it is hard to know what Trump was referring to when he called Montenegro's people "very aggressive". According to official figures, its defense spending amounts to €66 million ($76 million), or around 1.66 percent of GDP.

Pant earns maiden call-up to Indian Test team..
Batsman Cheteshwar Pujara, who has been playing County Championship cricket for Yorkshire, is also included in the squad . Wriddhiman Saha, who is recovering from the thumb injury he suffered during IPL 2018, has been dropped from the team.