MNI 5 Things: UK CPI, Core CPI Wedge Highest Since August 2013

By Jamie Satchi and Jai Lakhani

     LONDON (MNI) - The following are the key points from the UK inflation data

published Wednesday by the Office for National Statistics.

     - Headline inflation rose to 2.52%, to two decimal places, in July, the

highest rate since February, driven higher by PC games and transport fares.

     - Underlying inflation, however, remains weak. Core CPI held firm at 1.9%

in July, the joint-lowest rate since March. That took the wedge between the

headline rate and the core rate to 0.6pp -- the highest since August 2013

(August 2016 in absolute terms) -- raising concerns over the quality of

inflationary pressures.

     - After dragging on CPI in June, PC games lived up to its volatile tag and

was the driving force behind the 0.1pp rise in CPI in July. The 4.1% m/m rise in

Games, Toys and Hobbies was enough to offset continued discounting across

clothing and footwear.

     - Driving the subdued pace of UK house price growth was a further decline

in London rates. Capital house prices fell 0.7% y/y, the biggest decline since

September 2009. However, ONS revisions did turn a 5-month run of declines into

just two.

     - Input prices rose at the fastest pace since May 2017, courtesy of a 51.9%

y/y rise in crude oil prices. Imported materials, which account for roughly two

thirds of input PPI, rose by 10.0% y/y in June, the highest rate in 13 months.

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

[TOPICS: MABDS$,MAUDR$,MAUDS$,M$B$$$,M$E$$$,M$U$$$]