BBC News

Inflation in sharp rise to 1.9% in June

image copyrightAP
image captionWomen's clothing prices contributed heavily to the rise.

The rate of UK inflation rose sharply in June, pushed up by higher clothing, footwear, food and non-alcoholic drinks prices, official figures show.

The Consumer Prices Index rose to 1.9%, up from 1.5% in May, according to the Office for National Statistics.

Women's clothing prices contributed heavily to the rise.

Air fares and furniture prices also pushed the inflation rate up, the ONS said.

The rate is now close to the Bank of England's 2% target. It has remained below the target for seven consecutive months.

The pound jumped against the dollar following the inflation figures, climbing as high as $1.7144, around three quarters of a cent higher on the day.

Inflation as measured by the Retail Prices Index (RPI), which includes housing costs, rose to 2.6%, up from 2.4% in May.

Separately, figures from the ONS showed that annual house price inflation hit 10.5% in May.

Food and non-alcoholic drinks prices rose overall, with vegetables, bread and chocolate among the foodstuffs going up in price.

Economists said that the price rises may strengthen the case for a rise in UK interest rates, which have been held at a record low of 0.5%, especially against a backdrop of rising house prices and falling unemployment.

"The news will further fuel expectations that the Bank of England will start raising interest rates sooner rather than later, with November looking the most likely month for the first hike," said Chris Williamson. chief economist at research firm Markit.

He added that fine June weather may have led retailers to hold back on summer clothing discounts.


Jeremy Cook, chief economist at currency company World First, said the rise in prices was "a big surprise".

"Inflation is now rising at its fastest rate since January, with clothing, food and transport contributing well," he said.

However, for people who have been living with below inflation wage increases, "the situation just got a little more painful," he said.

Wage rises began to match inflation in April, after six years of falling real wages.

But the latest figures show wages rising at less than 1%, well below the 1.9% rise in prices recorded in June, meaning household incomes are being squeezed again.

New figures for wage rises in the three months to May are released by the ONS on Wednesday.

Related Topics

  • UK economy