United Kingdom Inflation

United Kingdom

United Kingdom: Inflation eases in July

August 19, 2014

In July, consumer prices fell 0.3% over the previous month, which contrasted the 0.2% rise recorded in June and came in below market expectations of a 0.2% drop. July’s decrease was mainly driven by falls in clothing prices as well as by lower prices for alcohol, financial services and food and non-alcoholic beverages.

Annual inflation eased from 1.9% in June to 1.6% in July. Annual average inflation inched down from June’s 2.1% to 2.0% in July, which is the lowest level since September 2005.

In its latest inflation report from August, the Bank of England projected that inflation would average 1.9% in 2014 and 1.8% in 2015. FocusEconomics Consensus Forecast panelists expect inflation to average 1.8% in 2014, which is down 0.1 percentage points from last month’s forecast. For 2015, the panel forecasts that inflation will average 2.0%.


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United Kingdom Inflation July 2014

Note: Annual and monthly variation of consumer price index in %.
Source: Office for National Statistics (ONS) and FocusEconomics calculations.


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