Inflation rates in Britain unexpectedly jumped to the highest level since March, with stores refusing to apply summer discounts to compensate for the losses incurred during the Corona pandemic crisis, which helped support price levels.
The annual consumer price index, which is the BOE’s preferable measure of inflation, rose in July by 1 percent, compared to expectations and the previous reading, which indicated a reading of 0.6 percent.
The annual core index witnessed an acceleration to 1.8 percent from a previous rise of 1.4 percent, while expectations were in favor of 1.3 percent.
The slight decline in the prices of clothes and shoes after stores abstained from applying summer discounts, along with high fuel prices and many other services helped the inflation rate to rise significantly over the past month.
The recovery of inflation in Britain increases signs that the recovery in the economy may take the shape of the letter V, but it may harm the performance of consumers who are already suffering from the lockdown measures related to the Corona pandemic.
As of 09:50 GMT, the pound traded slightly higher at 1.3230 after hitting a high of 1.3266, which is the highest since January 2.
Later in the day,
eyes will focus on the Fed minutes, which may hint to comments about inflation or
change in economic review in September.