UK Inflation Rate Back to 0%

British inflation rate slowed to 0 percent in June from 0.1 percent in May, in line with market expectations as transport and food prices fell further while cost of housing and utilities increased slightly.

Year-on-year, cost of food and nonalcoholic beverages fell the most by 2.2 percent, followed by transport (-1.8 percent), recreation and culture (-1.0 percent), clothing and footwear (-0.8 percent) and furniture, household equipment and routine maintenance of the house (-0.3 percent).

In contrast, upward pressure came from education (10 percent), alcoholic beverages and tobacco (2.3 percent), restaurants and hotels (1.9 percent), health (1.6 percent), communication (1.1 percent), housing and utilities (0.4 percent).

On a monthly basis, consumer prices were also unchanged in June, following a 0.2 percent increase in May. The largest downward contributions came from prices of clothing and footwear (-0.4 percent), mainly garments, particularly women’s outerwear and food and non-alcoholic beverages (-0.2 percent), mainly bread and cereals, and sugar, jam, syrups, chocolate and confectionery. In addition, transport prices rose at a slower 0.2 percent driven by transport services (particularly air transport and, to a lesser extent, sea transport) where fares rose this year but by less than a year ago. This was partially offset by a small upward contribution from motor fuels with average petrol prices rising by 1.1 pence per litre between May and June this year. The largest, but relatively small, upward contribution to the change in the CPI came from miscellaneous goods and services – prices rose 0.2 percent, driven by financial services.

The core inflation rate which strips out increases in energy, food, alcohol and tobacco, slowed back to 0.8 percent in June from 0.9 percent in May.

UK Inflation Rate Back to 0%

ONS | Joana Taborda |
7/14/2015 10:08:27 AM