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-UK June CPI +2.4% y/y vs +2.4% in May
-UK June Core CPI +1.9% y/y vs +2.1% in May
-UK June Input PPI +10.2% y/y vs +9.6% in May
-UK June CPIH +2.3% y/y vs +2.3% in May
-UK May House Price Index +3.0% y/y, joint-smallest rise since Aug 2013
By Laurie Laird and Jamie Satchithanantham
London (MNI) - Consumer price inflation steadied in June,
confounding forecasts of a petrol-fueled increase, as core inflation
fell to its lowest level in 15 months, potentially delaying a Bank of
England rate hike.
The consumer price index increased by an annual rate of 2.4% last
month, well below the MNI median forecast of 2.6%, after a 2.4% rise in
The cost of fuel and lubricants jumped by an annual rate of 11.6%,
extending the 8.0% gain recorded in May, adding 0.11 percentage points
to the change in annual CPI. Petrol prices hit 128.0 pence per litre
last month, while diesel rose to 132.1p a litre, the highest since
September of 2014 for both fuels.
But heavy early-summer sales countered much of the upward pressure
of fuel prices. Clothing and footwear prices slipped by 2.1% between May
and June, the largest June fall since 2012. That kept annual clothing
price inflation at a modest rate of 0.1%, subtracting 0.07 percentage
points from the change in CPI.
Falling computer games prices also kept broader inflation in check,
with the recreation and culture sub-index subtracting 0.04 percentage
points from the change in annual CPI.
Consumer prices registered no change between May and June, after
rising by 0.4% between April and May, compared to the MNI median of a
0.2% monthly increase.
That takes inflation above the Bank's 2.0% target for the sixteenth
straight month, but the outturn fell short of Bank of England staff
forecast of a 2.5% annual rise in June, as reported in the May Quarterly
Core inflation continued to ebb, falling to its lowest level since
March of 2017. Stripping out food and energy, annual core consumer
inflation slipped to 1.9% in June, below the MNI median of 2.2%, down
from the 2.1% pace recorded in May.
The June inflation report could provoke serious deliberations
amongst members of the Monetary Policy Committee, due to consider
interest rates early next month. The lower-than-forecast outturn,
combined with evidence of sluggish wage growth between March and May,
could delay a hike in the Bank's base rate.
CPIH, which regained its status as a national statistic last year,
steadied at an annual rate of 2.3% unchanged from May.
However, intermediate price inflation accelerated, courtesy of a
50.7% annual rise in crude oil prices in June.
Producer input prices jumped by 0.2% between May and June, for an
annual gain of 10.2%, the biggest gain since May of 2017, topping the
MNI median of a 10.0% year-on-year rise, after an 9.6% increase in May.
Output PPI increased by 0.1% between May and June, for a 3.1%
annual gain, the sharpest increase since December of 2017, but below the
median forecast of a 3.2% yearly increase. A 16.3% jump in the price of
petroleum products accounted for much of the gain.
Retail price inflation accelerated modestly, with RPI rising by an
annual rate of 3.4% in June, up from a 3.3% pace in May, below the MNI
median of 3.5% increase.
Stripping out mortgage interest payments, RPI-X rose by an annual
rate of 3.4% in June, matching the May outturn.
Meanwhile, UK house price inflation ebbed in May, with the official
House Price Index rising by an annual rate of 3.0%, below the
downwardly-revised 3.5% annual pace recorded in February. That's the
slowest pace of increase since house prices rose by an equivalent amount
in August of 2013.
London housing inflation continued to lag the rest of the country,
with prices in the capital slipping by 0.4%, the fourth consecutive
fall, the longest stretch since 2009.
-London bureau: 44 (0) 203 865 3812; email: email@example.com
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