Belfast Telegraph

Inflation rise expected in latest CPI report

By Ben Woods

Inflation is expected to pick up to 0.4% when officials figures for June are published today as rising petrol prices and air fares push up the cost of living.

The Consumer Price Index (CPI) measure of inflation is predicted to step up from 0.3%, where it has remained for both April and May.

Economists will also be looking out for any impact from the UK's referendum on the European Union, although the data will come to early to factor in the plunge in the value of the pound following the Brexit vote.

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: "The contribution of motor fuel prices to CPI inflation likely rose by about 0.4 percentage points in response to a 2.1% month-to-month rise in pump prices.

"A rebound in air fares inflation, following its surprise fall in May, likely also boosted the headline rate by a similar amount."

But these rises were offset by a decline in food and drink prices.

Howard Archer, chief European and UK economist at IHS Markit, said: "Inflation is expected to have been primarily pushed up in June by higher petrol prices.

"Sterling's sharp plunge following the UK's vote to leave the EU on June 23 will have occurred too late to have had any impact on inflation in June, and it will likely take time to feed through."

Belfast Telegraph