Both stories noted that index rose for the sixth straight month in July, inching up by 0.1 percent and 0.2 percent from the previous month and year respectively according to the Labor Department on Wednesday.
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Core inflation, which excludes energy and food, rose just 0.1 percent in July, after a 0.2 percent June gain. Energy prices were up 0.1 percent, led by a 0.9 percent rise in gasoline prices that offset declines in other components, including fuel oil.
Removing volatile food and energy prices, core inflation is running at 3.2 percent in the northern Front Range this year.
The retail price index increased 1.0% in July, in line with expectations and unchanged from June.
World food prices have generally been going down but in Qatar they rose, albeit by 0.9 percent year-on-year.
“Whilst it is true that the wage rises and low inflation has put more money in consumers’ pockets, we are still only able to spend, and consume, so much, particularly in the clothing sector”.
Danske Bank chief economist Angela McGowan said inflation was expected to stay low for the rest of the year and then pick up in January though that rise would be smaller than previously anticipated.
Also, utility natural gas prices dropped 10.8 percent over the one-year period, and utility electrical service dipped 1.8 percent. Clothing prices fell by 3.4% last month, compared to a 5.7% fall a year ago. Housing inflation continued to rise in June to 6.5% y/y, though pressure appears to be waning in Q2.
She said the start of rate increases will depend “critically on when there is more evidence” that inflation is heading toward the BoE’s 2% target. The Fed has said that it needs to feel “reasonably confident” that inflation is moving back to its 2 percent goal before beginning to raise interest rates. He added: “Long time lags between changes in import prices and shop prices mean that sterling’s recent appreciation will keep a lid on CPI inflation until the end of 2016″.
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The City has upped its bets on an interest rate hike after the cost of living unexpectedly returned to positive territory in July.
