Wealth Manager - the site for professional investment managers

Register to get unlimited access to Citywire’s fund manager database. Registration is free and only takes a minute.

UK inflation rises to 1.9% in June

UK inflation rises to 1.9% in June

UK inflation accelerated to 1.9% in June, exceeding the expectations of many economists.

The figure was lifted by rising food and clothing prices and was up from 1.5% in May, according to the Office for National Statistics.

However, while the surprise increase may spark calls for interest rates to be risen sooner, Capital Economics' Samuel Tombs expects inflation to fall back over the summer.

'The rise in clothing inflation from -0.1% in May to 2.4% seems to have largely reflected the later start to the summer sales this year than last, so its annual inflation rate should ease soon,' he said.

'In addition, a further significant rise in food inflation from June’s 0% rate seems unlikely, given that global agricultural commodity prices have fallen in recent months and a price war between the supermarkets appears to be building.'

Tombs adds that the impact of sterling's appreciation over the last 12 months has not yet been fully felt, while falling utility bills could also see inflation fall to around 1% by the end of the year, giving the Bank of England more flexibility around when it chooses to rise rates. 

However, Markit chief economist Chris Williamson sounds a more hawkish note, pointing to surging house prices and falling unemployment. He said: 'With inflation almost hitting the Bank of England’s 2% target, the housing market booming, the economy growing strongly with no signs of momentum being lost and unemployment plummeting, the case for higher interest rates is building.'

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Play On the Road Challenge: Clay pigeon shooting with Thesis' Lansdowne

On the Road Challenge: Clay pigeon shooting with Thesis' Lansdowne

Eleanor Mahmoud goes clay shooting at the National Clay Shooting Centre with Sam Lansdowne from Thesis Asset Management

Play AA-rated Flood on gov't bonds: 'the maths doesn't add up'

AA-rated Flood on gov't bonds: 'the maths doesn't add up'

He also addresses why his Newton Multi-Asset Income fund has such a high cash weighting and why he sees renewables as such a good opportunity.

Play AAA-rated Ali: Identifying the peripheral European plays

AAA-rated Ali: Identifying the peripheral European plays

Citywire AAA-rated Tawhid Ali thinks that plenty of good stocks in the European periphery are being thrown out with the proverbial bath water.

Read More
Your Business: Cover Star Club

Profile: Brewin's Cardiff boss on the Welsh opportunity

Profile: Brewin's Cardiff boss on the Welsh opportunity

Prior to becoming head of Brewin Dolphin Cardiff, Welshman David Myrddin-Evans had only previously visited the city to watch the rugby.

Wealth Manager on Twitter