MNI BRIEF: UK Core Inflation Inches Higher On Services Uptick
MNI (LONDON) - UK headline inflation was 2.2% in August on an annual basis, unchanged from July's year-on-year rearing and in line with financial market expectations, the Office for National Statistics said Wednesday.
On a monthly basis, CPI rose by 0.3% in August 2024, the same rate as in August 2023. The largest upward contribution to the monthly change in annual rates came from air fares, which rose this year but fell a year ago; the largest offsetting downward contributions came from motor fuels, restaurants and hotels. Core CPI rose by 3.6% in the 12 months to August 2024, up from 3.3% in July; the CPI goods annual rate fell from negative 0.6% to negative 0.9%, while the CPI services annual rate rose from 5.2% to 5.6%.
The data is largely in line with Bank of England expectations, although probably at the upper end, perhaps sealing the deal for the Monetary Policy Committee to keep rates unchanged at 5.0% for another meeting at least. (see MNI POLICY: BOE Seeks Low Key QT, No Sharp Pace Change Likely )