United Kingdom Inflation Edges Down to 2.8% in July

In July, UK's Consumer Prices Index grew by 2.8 percent on the year, down from 2.9 percent in June. While prices of air fares, recreation and culture, and clothing and footwear declined, cost of petrol and diesel increased.

The largest downward contributions to the change in the inflation rate came from recreation and culture which prices, overall, fell by 0.4 percent between June and July compared with a rise of 0.2 percent a year ago and clothing and footwear prices, down by 3.2 percent between June and July compared with a smaller fall of 2.6 percent a year ago.

There was a mixed picture in the transport sector. Air fares provided a large downward contribution with prices rising at a slower rate than a year ago. The downward effect from air fares was partially offset by petrol and diesel prices which rose by an average of 0.7p and 0.4p per litre respectively between June and July this year, compared with falls of 1.2p and 1.6p per litre a year ago.

Taking a longer term view, the three main contributors to the 12-month inflation rate in the last five years have been food and non-alcoholic beverages; housing, water, electricity, gas and other fuels; and transport (including motor fuels). Combined, these three sectors have, on average, accounted for over half of the 12-month inflation rate each month.

ONS | Nuno Fontes | nuno@tradingeconomics.com
8/13/2013 11:49:36 AM