Consumer price in the U.K. hold flat in July amid expectations for a 0.3% drop, while the annual rate of inflation grew 1.8% from the previous year to hold below the Bank of England’s 2% target. At the same time, the core CPI unexpectedly rose to an annualized rate of 1.8% from 1.6% in June, and the stickiness in consumer price may lead the BoE to hold a neutral policy stance going forward as policy makers expect economic activity to improve throughout the second-half of the year. Meanwhile, the breakdown of the report showed the cost of transportation increased 1.7% during the month, helping to off-set the 3.2% drop in the price of clothing and footwear, while price for alcohol and tobacco increased 0.3% after falling 0.7% in June. Meanwhile, the retail price index also held flat in July despite forecasts for a 0.2% drop, while the annual rate slipped 1.4% from the previous year versus projections for a 1.7% contraction.
