The ONS said Britain’s consumer price index measure of inflation lifted from 0.5% in June, and was also edged up by rises in alcoholic drinks and accommodation.
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USA consumer prices were unchanged in July as the cost of gasoline fell for the first time in five months and underlying inflation moderated, which could further diminish the prospect of a Federal Reserve interest rate increase this year.
Excluding often-volatile categories of food and energy, consumer prices rose 0.1% in July. The inflation rate in the year to July 2016 picked up to 0.6% from 0.5% in the year to June 2016, the Office for National Statistics (ONS) said on its website on Tuesday.
Sal Guatieri, senior economist at BMO Capital Markets, said the new report showing a slowdown in inflation pressures could make Fed officials “a little more uncertain” about how long it will take to reach the Fed’s 2 percent inflation target. A September rate hike has been virtually priced out.
The Fed uses a different inflation gauge, based on personal consumption expenditures, that runs lower than the consumer price index.
The last time the Fed raised its benchmark overnight interest rate was in December, the first time in almost a decade.
Gasoline prices fell 4.7 % in July, the first drop since February, reflecting renewed declines in crude oil prices.
Food inflation (primary plus manufactured food) rose to 11.3 per cent from 8.23 per cent in June, due to a rise in both primary and manufactured food inflation. Food prices were unchanged, but the cost of food consumed at home fell 0.2 percent.
“In contrast, we expect core WPI inflation to continue to rise, pushing up headline inflation, which would considerably narrow the gap between wholesale and retail inflation in second half of FY2017”, she added.
The price of petrol climbed from 111p in June to 111.8p a litre in July, while the cost of diesel rose from 112.1p to 113p a litre in the same period. The consensus among economists surveyed by MarketWatch was for a 0.2% increase in the core reading.
Prices for medical care, new vehicles, and motor vehicle insurance also increased.
Please Wait while comments are loading. That’s mainly because the latest reports were mostly for the three months through the end of June.
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Fed policy makers are looking for modestly firmer inflation readings, coupled with low unemployment, when the considering whether to raise the central bank’s benchmark interest rate. The company on Tuesday raised its full-year earnings forecast after reporting a 6.6 percent rise in quarterly sales.
