London: Britain’s Consumer Price Index (CPI) rose by 2.2 per cent in the 12 months to July, official data showed on Wednesday.
The figure was up from 2.0 percent in both May and June 2024, according to the Office for National Statistics (ONS). July’s CPI reading came in below expectations of a rise to 2.3 per cent from economists polled by Reuters.
“Inflation ticked up a little in July as although domestic energy costs fell, they fell by less than a year ago,” said ONS chief economist Grant Fitzner. “This was partially offset by hotel costs, which fell in July after strong growth in June,” reported Xinhua news agency
Core CPI, excluding energy, food, alcohol and tobacco, rose by 3.3 percent in the 12 months to July 2024, down from 3.5 percent in June, and the CPI services annual rate fell from 5.7 percent to 5.2 percent. Falls in both rates will offer significant relief to the Bank of England (BoE)
“The first rise in inflation in seven months may sound like bad news, but in fact the small size of the increase — and the sharp fall in services inflation that lies behind it — is good news for both consumers and policymakers,” said Lalitha Try, economist at the Resolution Foundation.
Leading think tank the National Institute of Economic and Social Research (NIESR) said Britain’s inflation was expected to continue hovering close to, but above, the BoE’s 2-percent target in the coming few months, before stabilizing in early 2025.
However, strong wage growth, coupled with falling but still high core and services inflation, may mean the BoE could exercise some caution concerning further rate cuts, said the NIESR.
On August 1, the BoE lowered the benchmark interest rate to 5 percent from 5.25 percent, the first cut in four years.
–IANS
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