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Inflation in UK edges higher in June

Staff Writer |
UK inflation jumped higher than expected in June, according to the Office for National Statistics, and is likely start rising even higher due to the slump in sterling since the Brexit vote.

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The Consumer Prices Index (CPI) rose 0.5% in the year to June, which was higher than the 0.3% increase a month ago and topped economists' predictions for a 0.4% rise. Month-on-month, CPI was up 0.2%, the same rate as last month, as forecast.

"Today's figures were collected before the EU referendum, so recent falls in the value of the pound will have had no impact on them," ONS statistician Phil Gooding said.

"The rising cost of European air flights, possibly boosted by the Euro football championships, was the biggest reason for this month's increase in inflation. The growing cost of oil, feeding through to petrol prices, also helped nudge up CPI," he added.

Core CPI, which strips out volatile prices like fuel and food, was up 1.4%, beating last month's 1.2% rise and economists' predictions of a 1.3% increase thanks to upward pressure from toys and hobbies such as computer games.

The ONS said the largest downward pull on inflation in the period comes from grocery prices, while there also continues to be a downward pressure from transport prices, though this has eased. Upward pressures come from a variety of categories, most notably restaurant and hotel bills.

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