- Posted by currencies in Rate Alerts
- July 18, 2018
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British inflation failed to rise as expected last month, potentially giving Bank of England policymakers pause for thought ahead of a widely expected interest rate hike next month.
Despite motor fuel prices rising to their highest since September 2014, annual consumer price inflation held steady in June at 2.4 percent.
The figure was at the bottom end of forecasts in recent pools of economists who had expected to see the first increase this year, to 2.6 percent.
Britain’s economy appears to be picking up after a slow first three months of the year, when unusually heavy snow hurt demand, and the central bank worries that growth is close to the modest pace at which it will start to push up inflation.
Core consumer price inflation, which strips out energy and food prices among other things, fell to 1.9 percent from 2.1 percent in May — below all forecasts.
On Tuesday data showed British workers’ wages rose at the slowest rate in six months during the three months to May despite a record number of people in jobs, challenging the BoE as it considers raising rates next month.
Still, a poll of economists also published on Tuesday showed around 47 out of 75 think the BoE will raise rates to a new post-financial crisis high of 0.75 percent in August. The remainder thought it would stay on hold.