Inflation in the UK reaches lowest level in 1.5 years
Annual inflation in the UK dropped to its lowest level since February 2022 in July.
As monetary tightening measures continue in the UK, annual inflation has also reached its lowest level in 1.5 years.
In July, annual inflation in the country was recorded at 6.8%. Economists surveyed by Bloomberg had expected annual inflation to be at 6.7%. Thus, the headline inflation figure exceeded expectations for the fifth time in six months.
However, a monthly deflation was observed during the same period. Consumer prices in July decreased by 0.4% compared to the previous month. The expectation for this data was a 0.5% decrease.
The rise in prices, particularly in the transportation group, had a noticeable impact.
On the core inflation side, a sideways trend was observed. Consumer prices excluding energy and food increased by 6.9% annually in July. This was the same level as in June. The Bloomberg survey had projected core inflation at 6.8%.
In its recent meeting, the Bank of England raised its policy rate to 5.25%, reaching a 15-year peak.
While the text of the decision largely maintained the guidance on the interest rate path as seen in previous texts, it was stated that if price pressures become more persistent, there may be a need for further tightening of monetary policy.