UK Inflation Rises
- Posted by currencies in Bank of England, Bremain, Brexit, Budget, Currency, Dollar, Economy, EUR, GBP, Inflation, Mark Carney, Prime Minister, UK, Uncategorised
- August 14, 2019
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Annual consumer price inflation rose to a three-month high of 2.1% in July from 2.0% in June, the Office for National Statistics said, bucking the average expectation in a Reuters poll of economists for a fall to 1.9%.
Earlier this month the BoE predicted consumer price inflation would fall to a three-year low below 1.6% in the final quarter of this year, reflecting lower oil prices and government caps on household energy bills.
This is despite a sharp fall in the value of sterling, which has gathered pace since Boris Johnson became prime minister last month with the promise to take Britain out of the European Union on Oct. 31, even if that means leaving without a divorce deal.
There was little immediate market reaction to the data, with analysts more focussed on the government’s Brexit policy.
Inflation surged after sterling fell more than 10% in the wake of June 2016’s referendum decision to leave the European Union, peaking at a five-year high of 3.1% in November 2017.
Data this morning also showed that house prices rose by an annual 0.9% across the United Kingdom in June, unchanged from May and the joint-weakest increase since November 2012.
The year-on-year decline in house prices in London – which has been hardest hit by concerns about a disorderly Brexit – levelled off slightly to show a fall of 2.7% after a 3.1% drop in June which was the largest since September 2009.
Sentiment towards the pound has taken a beating as some investors have ratcheted up their expectations about a no-deal Brexit while others are expecting increased political uncertainty in the coming months.
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