MNI DATA IMPACT: Rising UK CPI Presents BoE Dilemma>

By Les Commons and Laurie Laird

     LONDON (MNI) - CPI exceeded the Bank of England's target in July, 

despite a sharply slowing economy, and recent weakness in sterling could 

provide further inflationary pressures in months to come. 

     The following are the key points from inflation data published 

Wednesday by the Office for National Statistics. 

     -- CPI hit an annual rate of 2.1% in July, well above the median 

MNI forecast and Bank of England staff forecasts of a 1.8% annual 

rise. 

     -- Pipeline inflation also accelerated, with input PPI rising 

to 1.3% in July from an upwardly-revised 0.3% gain and output PPI 

increasing by 1.8% from 1.6% in June. 

     -- ONS officials acknowleged a link between sterling weakness and 

inflation, but declined to quantify the effect of recent currency 

movements on the July inflation data.  

     -- However, statisticians did note that two-thirds of manufacturing 

inputs are imported. The sterling effective exchange rate fell by 1.4% 

between June and July and by 2.6% over July of 2018 to its lowest level 

since October 2016.   

     -- London house prices stabilised, rising by 0.7% between May and 

June, although recorded a 2.7% decline over May 2018. London housing 

costs retreated by 5.1% between July 2017 and May 2019.  

-London bureau: 44 (0) 203 865 3812; email: ukeditorial@marketnews.com 

[TOPICS: M$B$$$,MABDS$,MAUDR$]