UK August Inflation Rate Higher than Expected

Consumer prices in the United Kingdom rose by 2.9 percent in the year to August 2017, beating market expectations of 2.8 percent and following a 2.6 percent gain in the previous month. Rising prices for clothing and motor fuels were the main contributors to the increase.

Year-on-year, prices rose further for: Clothing and footwear (4.6 percent, the biggest rise since the consumer price index was launched in 1997, from 3.2 percent in July); transport (3.2 percent from 3.1 percent in July), in particular fuels and lubricants (5.1 percent from 2 percent); furniture, household equipment and maintenance (4.2 percent from 3.8 percent); recreation and culture (1.8 percent from 1.4 percent); and restaurants and hotels (3.5 percent from 3.1 percent). Meanwhile, inflation was steady for housing, water, electricity, gas and other fuels (at 2.2 percent) and miscellaneous goods and services (at 1.9 percent); while prices increased at a softer pace for food and non-alcoholic beverages (2.1 percent from 2.6 percent in July) and health (2.6 percent from 2.7 percent).

The consumer prices index including owner occupiers’ housing costs (CPIH) rose by 2.7 percent in August, up from 2.6 percent in July.

The annual core inflation rate, which excludes prices of energy, food, alcohol and tobacco, rose to 2.7 percent in August, from 2.4 percent in the previous month and above market consensus of 2.5 percent.

On a monthly basis, consumer prices jumped 0.6 percent after falling 0.1 percent in July and beating market forecast of a 0.5 percent gain. Prices rose sharply for clothing and footwear (2.4 percent), fuels and lubricants (1.6 percent), furniture, household equipment and maintenance (1.8 percent), and communication (1.7 percent).

UK August Inflation Rate Higher than Expected

ONS | Joana Ferreira |
9/12/2017 8:55:52 AM