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UK inflation falls to zero in June

Joanna Faith
Written By:
Joanna Faith
Posted:
Updated:
14/07/2015

The rate of UK Consumer Price Index (CPI) inflation fell to 0% in June, from 0.1% in May, according to official figures.

Falls in clothing and food prices were the main contributors to the change in the rate along with smaller rises in air fares than a year ago, the Office for National Statistics (ONS) said.

The CPI rate has been hovering around 0% since February. It dipped below zero in April for the first time in 50 years, sending the UK briefly into deflationary territory.

Maike Currie, associate investment director at Fidelity Personal Investing, said: “These numbers come a day ahead of the UK employment figures expected to show average wages are rising. Coupled with low inflation, this means more pounds in people’s pockets and a boost to the UK consumer which should be positive for growth as consumer spending remains the backbone of the UK economy.”

Rain Newton-Smith, CBI Director of Economics, said: “Price inflation remains elusive. While this is likely to persist in the coming quarter, inflation should rise relatively swiftly from the end of 2015, as the effect of past falls in oil prices fades.

“Inflation of below 1% over the rest of this year should give the [Bank of England’s] MPC enough breathing space to leave interest rates unchanged at least until early 2016.”

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