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UK inflation highest since November 2014

Staff Writer |
UK inflation edged higher in July to its highest level since late 2014, lifting sterling from its lows, though official figures showed core inflation had slipped lower.

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Data from the Office for National Statistics (ONS) showed the consumer price index (CPI) rose to 0.6% compared to the same month last year, up from the 0.5% in June that economists expected to be maintained.

Month-on-month data found CPI fell 0.1%, as expected, after a 0.2% increase in June.

The pound's reaction was to bounce on the news.
Core CPI, which excludes more volatile prices such as fuel and food, fell to 1.30% in July, as economists forecast, from the 1.40% year-on-year rise the month before.

Having fallen back to multi-year lows in anticipation of bad news from the many ONS announcements this week, the pound's reaction was to bounce on the news, rising 0.8% against the dollar to 1.2983 and returning to 1.1519 on the euro after sinking to three-year lows earlier in the session.

Rising prices for motor fuels, alcoholic beverages and accommodation services were the main contributors to the rise in CPI, helped by a smaller fall in food prices than a year ago.

These upward pressures were only partially offset by falls in social housing rent, and falling prices for certain games and toys.

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