UK July Inflation Rate Unexpectedly Holds Steady at 2.6%

Consumer prices in the United Kingdom rose by 2.6 percent in the year to July 2017, the same pace as in June and missing market expectations of a 2.7 percent gain. Prices rose further for housing and utilities, food and non-alcoholic beverages, clothing and household goods, while cost of transport, recreation and culture, and restaurants and hotels went up at a slower pace.

Prices rose further for: Housing, water, electricity, gas and other fuels (2.2 percent from 2 percent in June); food and non-alcoholic beverages (2.6 percent from 2.3 percent); clothing and footwear (3.2 percent from 2.7 percent); furniture, household equipment and maintenance (3.8 percent from 3.2 percent); miscellaneous goods and services (1.9 percent from 1.7 percent); and health (2.7 percent from 2.4 percent). Meanwhile, cost increased at a slower pace for: Transport (3.1 percent from 3.7 percent in June), in particular fuels and lubricants (2 percent from 4.1 percent); recreation and culture (1.4 percent from 1.5 percent); and restaurants and hotels (3.1 percent from 3.3 percent).

The consumer prices index including owner occupiers’ housing costs (CPIH) also rose by 2.6 percent in July, the same pace as in June.

The annual core inflation rate, which excludes prices of energy, food, alcohol and tobacco, stood at 2.4 percent in July, unchanged from the previous month and below market consensus of 2.5 percent.

On a monthly basis, consumer prices fell 0.1 percent after showing no growth in June and missing market forecast of a flat reading. Prices dropped for clothing and footwear (-3 percent), fuels and lubricants (-1.3 percent), furniture, household equipment and maintenance (-1.2 percent), and recreation and culture (-0.2 percent).

ONS | Joana Ferreira |
8/15/2017 8:52:16 AM