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 French fund CEOs: 'Brexit is a lose-lose situation for all of us'

French fund CEOs: 'Brexit is a lose-lose situation for all of us'

'We'll all lose out - but London is an international city, Paris is not.' Leading French asset management CEOs tell us what they think Brexit will mean for the investment business.

Play Henderson Eurotrust's Stevenson: dealing with European cynicism

Henderson Eurotrust's Stevenson: dealing with European cynicism

Tim Stevenson talks about where he finds his opportunities in the current environment in Europe

Play Mark Barnett - part 2: why I'm not buying Lloyds

Mark Barnett - part 2: why I'm not buying Lloyds

In the second part of our exclusive video interview, Barnett explains why he has no intention of buying Lloyds, and where he sees the greatest income opportunities.

Read More
Wealth Manager on Twitter