July CPI rose to highest since Mar

JUL CPI 0.4% M/M, +1.0% Y/Y VS +0.6% Y/Y JUN

JUL CORE CPI 0.4% M/M, +1.8% Y/Y VS +1.4% Y/Y JUN

JUL OUTPUT PPI +0.3% M/M; -0.9% Y/Y VS -0.9% Y/Y JUN

JUL INPUT PPI +1.8% M/M; -5.7% Y/Y VS -6.7% Y/Y JUN

Y/Y inflation ticked up to 1.0% in July, the highest level since Mar and beating market forecasts looking for an unchanged reading. Core inflation picked up as well, rising to 1.8%. Clothing and footwear posted the largest upward contribution, adding 0.15pp, mainly on the back of changed sales patterns. Transport was the second driver of Jul's uptick, contributing 0.12pp to CPI change due to a rise in petrol and diesel prices. The only negative contribution came from food and non-alcoholic beverages, subtracting 0.03pp from CPI. The ONS noted that only 12 items were unavailable in Jul and a new experimental series accounting for the change in spending patterns was released, showing that prices rose more than the headline figures. While the headline output PPI remained unchanged at 0.9% y/y, the input PPI improved to -5.7% in Jul, up from -6.7% in Jun. Petroleum products were the largest contributor to the output PPI, while crude oil showed the largest upward contribution to input PPI. Prices for petroleum goods and crude oil increased on the month.