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Further Rise In UK Inflation

James Boston
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Further Rise In UK Inflation

It could be called Inflation Day in the UK today as the National Statistics office provides a thorough across the board set of price growth data. The headline is the Consumer Price Index (CPI), this has come in at 1.9% year on year compared to 1.6% in May and a consensus estimate for 1.5% price expansion. Month on month this is now reading at 0.2% in contrast to the prior month’s contraction of -0.1%, no change had been expected in this figure. The Core CPI now stands at 2.0%, this is a year on year reading to June and compares to May’s 1.6% rise, the consensus was for 1.7% growth.

The Retail Price Index (RPI) is continuing to expand, this now stands at 2.6% year on year for June, the May equivalent was 2.4% and a reading of 2.5% was anticipated by the markets. Month on month the RPI expanded 0.2%, this compares to 0.1% growth the previous month and a consensus estimate for a flat 0% reading.

The Producer Price Index (PPI) completes the inflation picture this morning, on the Input side the year on year number is now reading at -4.4%, this follows 5.0% expansion in May, consensus estimates for this figure were for a contraction of -4.5%. Month on month the reading is showing at -0.8% contraction compared to 0.9% growth in May and a market consensus estimate for 0.1%.

PPI Output is reading at 0.2% year on year for the month of June compared to 0.5% in May, no change was anticipated to this figure. Month on month this is now -0.2% in comparison to a fall of -0.1% the previous month, markets had expected expansion of 0.1% in this index.

Inflation overall is now very close to the Bank of England target rate of 2.0%, this will no doubt add a little pressure for an early rate hike.

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