- U.K. Inflation Unchanged in July
The United Kingdom inflation rate remain unchanged in July.
The consumer prices which measures inflation rose 2.6 percent from a year earlier, according to the Office for National Statistics. This is same as June but better than 2.7 percent projected by economists.
While low pound sterling continued to aid inflation. Its impact on manufacturing sector, exports, is lower than previously estimated. Therefore, experts believed while economic growth may be affected as the U.K. looks to negotiate its way out of the European Union, inflation rate may no longer hit 3 percent as previously estimated. This is partly due to low global oil prices and inflation rate across the world.
“While today’s data will continue to test the patience of some BOE hawks, we expect the committee as a whole to continue looking through inflation spikes in favor of slower growth,” said James Smith, an economist at ING in London. “We don’t expect a rate hike this year.”
According to the ONS, weak fuel prices kept a lid on inflation rate last month. But prices for clothing, household goods and food propped up the inflation rate.
The pound has plunged 13 percent since the UK voted to leave the European Union. Morgan Stanley and HSBC projected further decline for the pound against the Euro single currency, especially with the growing Europe economy. Both financial institutions forecast parity by 2018.