You are here: Home - Investing -

UK inflation sees surprise jump to 2.6%

0
Written by:
14/08/2012
UK CPI inflation has risen to 2.6% in July, up from 2.4% in June, surprising economists who had expected a fall to 2.3%.

The Office for National Statistics said transport, clothing and footwear drove the increase, which may serve to mute expectations for further stimulus from the Bank of England in the immediate future.

RPI rose from 2.8% to 3.2% over the same period, the ONS said, reversing the fall from 3.1% seen last month.

The figures come after the price of Brent crude oil hit a three-month high of $115 a barrel yesterday, a sign input costs may be set to rise again.

Having been as high as 5.2% last September, CPI inflation came in at 2.4% in June, the lowest level since November 2009’s 1.9% figure and down from 2.8% in May.

That month-on-month fall had also surprised economists, who attributed much of the drop to retailers undertaking summer discounting earlier than usual.

“As such, this morning’s data may give a clearer indication of the underlying inflationary trend,” Barclays analysts said ahead of the release of this morning’s data.

The Bank of England has previously forecast that inflation would fall to around 2.1% in the final quarter of 2012, but then might rise slightly before averaging below the 2% target from late 2013 onwards.

Capital Economics, meanwhile, expects UK CPI inflation to stand at around 1% by December, as energy price increases fall out of the index and core inflation drops sharply.

“Admittedly, the near-term outlook for inflation has worsened slightly on the back of the renewed rise in petrol prices and the rise in agricultural prices. But despite these factors, inflation still looks likely to drop below its 2% target within the next two or three months,” said Capital’s chief UK economist Vicky Redwood.

Tag Box

Debt

Pension

Spending

Financial fitness

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Are you a first-time buyer looking for a mortgage?

Look no further, get the help you need by searching for your perfect mortgage

Which ISA is right for you? A round up of the six products available in 2017

From cash to innovative finance to lifetime, here's our guide to the ISA products available to savers this yea...

Guide to buy-to-let tax changes

In late 2015, former Chancellor George Osborne announced a range of  tax measures aimed at landlords, which t...

A guide to switching energy provider

All you need to know about switching from one energy supplier to another.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Five fund tips for a 0.25% interest rate environment

With interest rates stuck at a record low 0.25% and expectations rates could fall to close to zero, here are ...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Investing your money

Alliance Trust Plc gives you smart insight into how to invest your money

Money Tips of the Week

Read previous post:
2198468-terrace
Homeowners upgrading their homes, but failing to update their insurance

Brits are increasingly choosing to upgrade their homes rather than move to a new place, but are still failing to...

Close