Wealth Manager - the site for professional investment managers

Register to get unlimited access to all of 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 Potential US rate rise, cheap oil & the Europe opportunity

Potential US rate rise, cheap oil & the Europe opportunity

This week we analyse the implications of a possible rise in US interest rates, the impact of cheap oil and the European equity opportunity.  

Play Carmignac's Crowl: what QE could mean for Europe

Carmignac's Crowl: what QE could mean for Europe

The ECB is widely expected to finally fire its QE gun this week. Carmignac's Sandra Crowl discusses the implications for the eurozone.

Play Grexit worries, currency wars and a grizzly outlook for 2015?

Grexit worries, currency wars and a grizzly outlook for 2015?

The first Investment Pulse of the year looks at the potential impact of Greece leaving the euro, volatility in currency markets and the UK’s economic prospects.

Your Business: Cover Star Club

Profile: DIY investing is biggest threat to industry, says Whitechurch

Profile: DIY investing is biggest threat to industry, says Whitechurch

The industry is at risk of pushing potential investors down the DIY route unless it does more to make its services accessible says the Whitechurch Securities boss

Wealth Manager on Twitter