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Thursday, January 27, 2022

UK Inflation Jumps in July as Clothes Shops Shun Discounts

British inflation jumped unexpectedly last month to its highest rate since March, pushed up by clothing retailers refraining from their usual summer discounts.

This is as they reopened from the coronavirus lockdown, official data showed on Wednesday.

Annual consumer price inflation rose to one per cent in July from 0.6 per cent in June, the Office for National Statistics (ONS) said.

That was above all forecasts in a Reuter’s poll of economists that had pointed to an unchanged rate of 0.6 per cent.

Clothing and footwear prices were the biggest contributor to the rise in inflation, the ONS said.

In most years retailers slash clothes prices between June and July to clear out their summer ranges in preparation for autumn.

This year, the drop in clothing and footwear prices was unusually small, perhaps reflecting discounting early in lockdown.

“We’ve seen a very different pattern this year; we’ve not seen that movement this year,’’ an ONS statistician said.

Petrol prices – and greater costs for haircuts, dentistry and physiotherapy – also contributed to higher inflation, the ONS said.

Core inflation – which excludes typically volatile energy, food, alcohol and tobacco prices – also rose to 1.8 per cent from June’s 1.4 per cent.

Economists had expected the rate to fall slightly to 1.3 per cent.

The Bank of England said earlier this month it expected inflation to turn briefly negative in the near term, falling to -0.3 per cent in August. (Reuters/NAN)

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