3min read
Published on: Aug 14, 2024
#Daily Brew
Inflation in the United Kingdom rose to 2.2% in July, as per the latest data released by the Office for National Statistics (ONS).
While the figure is below the less-than-expected figure of 2.3% as forecasted in a Reuters poll of economists, it is still above the Bank of England’s target of 2%.
The Consumer Prices Index (CPI) in the U.K. rose by 2.2% year-over-year (YoY) in July, a rise from the CPI of 2% in June.
As the ONS released the July inflation data, Sterling slipped 0.19% to $1.2841.
CPI rose by 2.3% YoY in April, 2% YoY in May, and 2% YoY in June.
The ONS recently released the U.K. unemployment report also which highlighted that unemployment rate in the country has slipped to 4.2% during the last quarter, i.e. April-June from 4.4% during the preceding quarter, i.e. January-March.
During April-June, average pay excluding bonuses grew by 5.4% YoY, the lowest rate in two years.
Early this month, the Bank of England cut the base interest rate from 5.25% to 5%, the first rate cut since March 2020.
The Bank expected inflation to slightly rise in the coming months due to wage increases, service prices, and still-tight labor market conditions.
There is a lot of uncertainty over whether the central bank will even make another cut this year.
As per the latest data from Bureau of Labour Statistics (BLS), the CPI in the United States rose by 2.9% YoY in July as compared to 3% YoY in June.
Prices rose 0.2% in July after reporting a decline of 0.1% in June.
Core CPI, excluding volatile foods and energy, rose by 3.2% YoY in July, as compared to 3.3% YoY in June.
Reuters poll of economists had forecast the CPI increasing 0.2% on the monthly basis and 3% YoY in July.
The U.S. Dollar index fell 0.05% to close at 102.5 on 13 August ahead of the release of inflation data.
The latest data raises the chances of the Federal Reserve cutting interest rates next month in September as inflation seems to be cooling down.
The Fed has held interest rates at a 23-year high of 5.25%-5.5% for over a year.
The central bank also bears the responsibility of allaying the global fear of recession in the U.S., sparked by rising unemployment rates in the country.
This article is for informational purposes only and not intended as investment or financial advice. It contains opinions and speculations that are subject to change without notice.
The author and publisher disclaim any liability for decisions made based on the content of this article. Readers are advised to conduct their own research and consult a financial advisor before making investment decisions.
Join the community to receive exclusive market analysis and updates!
Ignite your financial journey with BitDelta's diverse asset classes.
4mins
Sep 13, 2024
Financial Markets
4mins
Sep 11, 2024
Financial Markets
5mins
Sep 4, 2024
Financial Markets