UK Inflation Rate Unexpectedly Slows To 2.6% In June

Consumer prices in the United Kingdom rose by 2.6 percent in the year to June 2017, easing from a four-year high of 2.9 percent in May and missing market expectations of a 2.9 percent gain. It was the lowest inflation rate in three months, as prices rose at a slower pace for motor fuels and certain recreational and cultural goods and services.

Prices rose at a slower pace for: Transport (3.7 percent from 4.7 percent in May), in particular motor fuels (4.1 percent from 7.5 percent); recreation and culture (1.5 percent from 2.3 percent); housing, water, electricity, gas and other fuels (2 percent from 2.1 percent); and clothing and footwear (2.7 percent from 3.1 percent). Meanwhile, cost rose further for: Food and non-alcoholic beverages (2.3 percent from 2.1 percent in May); furniture, household equipment and maintenance (3.2 percent from 2.4 percent); and restaurants and hotels (3.3 percent from 3.1 percent).

The consumer prices index including owner occupiers’ housing costs (CPIH) also rose by 2.6 percent in June, slightly down from 2.7 percent in May.

The annual core inflation rate, which excludes prices of energy, food, alcohol and tobacco, fell to 2.4 percent in June from 2.6 percent in May and below market consensus of 2.6 percent.

On a monthly basis, consumer prices were unchanged after rising by 0.3 percent in May and missing market forecast of a 0.2 percent gain. Prices rose for furniture, household equipment and maintenance (0.4 percent), restaurants and hotels (0.3 percent) and transport (0.1 percent), while cost fell for clothing and footwear (-1 percent), food and non-alcoholic beverages fell (-0.2 percent), and recreation and culture (-0.2 percent).

ONS | Joana Ferreira |
7/18/2017 9:21:27 AM