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UK inflation spikes to 2.6% in July

India Infoline News Service/ 17:41 , Aug 14, 2012

The rise in CPI last month was driven by a 21.7% rise in the cost of flights which saw overall transport prices rise by 1%.

UK's benchmark consumer inflation rose unexpectedly in July, spurred by a steep rise in air fares and increased prices for clothing and footwear, official figures showed on Tuesday.

Britain's annual consumer price index (CPI) rose by 2.6% in July compared to a gain of 2.4% in June, the UK Office for National Statistics (ONS) reported on Tuesday.

Prices saw a 0.1% monthly rise in July.

Economists had forecast a flat monthly reading and a 2.4% annual increase.

The rise in CPI last month was driven by a 21.7% rise in the cost of flights which saw overall transport prices rise by 1%.

The Bank of England's Monetary Policy Committee has repeatedly overshot its 2% CPI target in recent months.

On August 8, the UK central bank lowered its inflation forecast in its latest quarterly Inflation Report, and said that CPI was likely to fall below 2% by the end of next year.

Sir Mervyn King, Governor of the Bank of England, said that falling inflation and stable wages should gradually boost consumer spending higher.

 



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