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UK inflation rises above wage growth

Staff Writer |
UK inflation ticked up slightly last month for the first time since November, official figures revealed, but the measure used to determine rail fare hikes came in lower than expected.

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The consumer price index in July was up 2.5% on the same month a year ago, the Office for National Statistics revealed, with the rate picking up from 2.4% in the previous three months, as economists expected but undershooting the Bank of England's 2.6% forecast. CPI was flat on a month-on-month basis.

A day earlier, the ONS had revealed that average UK pay in the three months to June was up 2.4%, with the month on June alone seeing average wage growth of 2.1% year-over-year. Excluding bonuses, average weekly earnings stood at 2.7% for the second quarter.

Core CPI, which excludes prices for fuel and food, remained at 1.9%, in line with forecasts. CPIH, the ONS's preferred measure as it included a measure of owner occupiers' housing costs, also remained unmoved, at 2.3%.

Factory gate inflation edged down from 3.3% to 3.1%, but input price inflation spiked up further from 10.2% to 10.9%.

The retail prices index for July, which is used by the Department for Transport to determine the annual increase for train prices from next January, dropped to 3.2%, below the 3.4% that was forecast and the 3.6% rail fare increase seen last year.

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