💎 Fed’s first rate cut since 2020 set to trigger market. Find undervalued gems with Fair ValueSee Undervalued Stocks

UK inflation jumps unexpectedly in June to 1.9 percent

Published 15/07/2014, 09:34
UK inflation jumps unexpectedly in June to 1.9 percent

LONDON, (Reuters) - British inflation last month rose by more than expected to hit its fastest rate since January, picking up from a 4-1/2-year low, official data showed on Tuesday.

Separate data showed house prices also picked up speed, with property prices in London jumping by a record 20.1 percent over the 12 months to May.

Consumer prices rose 1.9 percent on the year in June, the Office for National Statistics said. Economists taking part in a Reuters poll had expected inflation to rise to 1.6 percent from 1.5 percent in May.

Inflation in Britain had been largely declining over the last year, helping the Bank of England to hold off on raising interest rates despite Britain's surprisingly strong economic recovery.

Compared with the previous month, the consumer price index in was up 0.2 percent in June, the ONS said.

The largest contribution to the year-on-year increase came from clothing and footwear prices - which did not fall as usually occurs in June when summer sales tend to start.

An ONS official said there were signs that good weather last month may have deterred retailers from cutting prices.

Food also contributed after it was weak last year. The ONS said there were no significant downward contributions to consumer price inflation.

Before December last year, annual inflation exceeded the Bank of England's 2 percent target every month since December 2009, eroding the spending power of households and making the fall in living standards a big political issue ahead of next year's elections.

An underlying measure of inflation, which strips out increases in energy, food, alcohol and tobacco, rose by 2.0 percent in June compared with the same month last year.

Data also released by the ONS on Tuesday showed that factory gate prices rose by 0.2 percent in annual terms, the lowest reading since October 2009 and undercutting economists' predictions of a 0.5 percent increase.

Separate data from the ONS showed house prices in Britain rose 10.5 percent in the year to May. Other more recent surveys have suggested rapid growth in house prices has started to cool off a little.

© Reuters. Customers shop in the F&F clothing department at a Tesco Extra supermarket in Watford, north of London

Excluding London and the south east, British house prices rose by 6.4 percent in the 12 months to May, the highest in nearly four years.

(Reporting by Andy Bruce and William Schomberg)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.