U.K Inflation Steady at 0.6 Percent in August

The U.K inflation was unexpectedly unchanged in August, even though there were signs that the increase in the prices of imported goods is pressuring costs, a report from the Office for National Statistics showed on Tuesday.

The consumer price index, which measures inflation rate remained 0.6 percent in August, below 0.7 percent predicted by analysts prior to the release.

Further analysis, revealed that the biggest upward increase was from food and air fares. While a small decline was recorded in motor fuels compared with a year ago.

According to the Office for National Statistics, the weak pound is pressuring the cost of raw materials, “though there is little sign of this feeding through to consumer prices yet.” Also, producer prices surged 0.1 percent in August and were 0.8 percent up from a year ago.

Year-on-year, retail prices rose 1.8 percent in August, after jumping 1.9 percent in July.

Overall, the result still points to a solid rebound from June 24 dip, when the pound plunged to 31-year low. Since then, the Bank of Japan has continued to support the economy by lowering interest rates to all time low and announced its readiness to do more if necessary.

The pound dropped from $1.3339 against the US dollar to $1.3281 after the report was made public.