Headline CPI fell 0.1 share factors month-on-month in July, whereas core CPI, excluding power, meals, alcohol and tobacco, fell 0.7 share factors to six.2%.
Meals inflation stays effectively above the headline charge however has additionally fallen, all the way down to 13.6% from las month’s 14.9% determine.
Chancellor Jeremy Hunt argued the autumn demonstrated the federal government’s plan to halve inflation is “working – plain and easy”, however famous it stays “too excessive” and a barrier to sustainably increased development.
Whereas Neil Birrell, CIO at Premier Miton Buyers, mentioned the shock fall “could present some aid” for the Financial institution of England, it’s unlikely to stop an extra charge hike tomorrow (21 September).
Alice Haine, private finance analyst at Bestinvest, additionally argued it “could also be too quickly to place the brakes on” if the central financial institution is eager to “tame persistent inflation for good”.
Nonetheless, whereas Daniel Casali, chief funding strategist at Evelyn Companions additionally famous the optimistic information relating to at present’s figures, he warned of the backward-looking nature of the info.
“It may very well be argued that the decline seen in power costs are within the rear-view mirror. Wanting ahead, the chance of one other leg up in inflation from power costs has elevated a little bit following the August determination by the Saudis and Russians to implement new crude oil provide cuts into 12 months finish,” he defined.
Chris Beauchamp, chief market analyst at IG Group, added that whereas Andew Bailey “could get his want” to convey charge hikes to an finish, the “ongoing rise in oil implies that the MPC can not take the prospect of extra hikes off the desk”.