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UK inflation jumps again

Following on from the consumer inflation surprise in the US on 13 July, this side of the pond we have a similar shock.

Tuesday, July 13, 2021

Following on from the consumer inflation surprise in the US on 13 July, this side of the pond we have a similar shock. The UK Consumer Price Index jumped 2.5% year on year, beating forecasts of a 2.1% rise and represents the second month in a row that inflation has been above the critical 2% level since 2019. The global semiconductor shortage is forcing up the prices in the second-hand car market with June seeing a 4.4% increase in the prices of used cars. Similar increases were seen in clothing prices and energy costs all exerting upward pressure on consumer price inflation. We have to assume that a lot of this is temporary – three months of rising inflation does not point conclusively to a new regime just yet. But it will likely make for heated discussions at the Bank of England.

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Charles Hepworth

Investment Director
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