UK inflation rises to 0.1% – live updates

The cost of living is on the rise again, despite another drop in British food prices and transport costs


Inflation could easily turn negative again this month, predicts Martin Beck, senior economic advisor to the EY ITEM Club:

“July’s uptick in inflation represents something of a false signal. The increase is largely due to clothing prices, with this year’s summer sales seeing less discounting than last year’s, and an increasing pressure on air fares.

Overall, the modest pickup in inflation appears to be largely a function of temporary factors rather than a sign that inflationary pressures are escalating.”

The pound is continuing to climb, in a fillip to UK readers who haven’t taken their summer holidays yet.

Sterling is up over 1 cent against the dollar now, at $ 1.571, and also gained one eurocent to €1.418.

“While wages are increasing rapidly, this is clearly failing to filter through to inflation. With sterling’s current strength and further fiscal tightness planned for the UK, if the MPC pulls the trigger too early on rate hikes it’s difficult to see how the Bank of England’s 2% inflation target will be reached in any reasonable timeframe.

“Making an assumption that underlying price pressure will suddenly begin to pick up in the coming quarters is an awfully risky call. If the Bank of England has seemed indecisive over rate hikes in recent months, this inflation report is unlikely to give them any reason to get off the fence and act.”

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Business | The Guardian