Inflation accelerated in Britain. Consumer prices, excluding housing, were 2.1 percent higher in July than a year earlier, according to a release released Wednesday by the British Bureau of Statistics (ONS). In June and May, another 2 per cent inflation was measured on an annual basis.
Analysts expected consumer prices to rise 1.9 percent.
Experts recalled the depreciation of the pound and the acceleration of inflation, but the ONS said it was too early to consider the depreciation of the pound as the main reason. Hotel prices have risen, video games and consoles, clothing and financial services have become more expensive. At the same time, fuel prices have fallen, while travel costs – air and boat tickets, international rail tickets – have risen less than a year earlier.
The annual inflation target set by the British government for the central bank is 2 percent. The Bank of England said in early August that inflation would fall to 1.6 percent, a three-year low, towards the end of the year, but would accelerate in the following years.
Core inflation, adjusted for volatile elements, including energy and food prices, accelerated to a six-month high of 1.9 percent from 1.8 percent. Analysts expected stagnation.
The pound lost 2.4 per cent against its major currencies in July, at the time of the change of government, and is currently the weakest exchange rate since 2016. Boris Johnson, the new prime minister of the ruling Conservative Party, is firmly of the opinion that the UK will leave the European Union on 31 October, the current deadline for Brexit, whether or not an agreement is reached with the community. However, businesses fear that an unordered separation could lead to disruptions in ports, thus increasing the price of imported products.