Bank of England (BOE) policymakers seem to be able to breathe a sigh of relief after seeing the latest reading of the UK inflation rate rebound after rising above the central bank’s target for two consecutive months.
The UK consumer price index (CPI) reportedly declined to 2.0%in July from a three -year high recorded the previous month at 2.5%, and missed expectations for a 2.2%rise.
In addition, data from the UK’s Office for National Statistics (ONS) also reported core inflation (excluding volatile food and energy prices), which showed a decline of 1.8% last month from 2.3% recorded in June.
Slower prices for clothing and footwear, as well as recreational goods and services were a major factor to the change in the annual inflation rate.
The pound showed little reaction following the data by continuing to trade lower against the strong US dollar.
Earlier this month, the BOE projected inflation to jump to 4.0% by the end of the year, the highest level in a decade. Even so, the central bank still considers the surge in inflation only temporary.
Meanwhile, the data still shows signs of continuing inflationary pressures in the prices paid and charged by factories.
