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UK inflation rises 7.9%, lower than expected

However, it remains uncomfortably above target and rate hikes will likely continue.

19 July 2023

UK CPI rose 7.9% year-on-year in June, lower than forecasts of an 8.2% rise. Core CPI also showed a lower advance of 6.9% versus the 7.1% increase expected. This is the first time that CPI numbers have come in below estimates for many months and will cheer investors that the UK’s peculiar inflation problem has finally turned. The Bank of England (BoE) will see this as evidence that their hawkish rate hiking policy is finally having an effect but let’s not get too carried away – inflation is still uncomfortably way above their target and hiking will likely continue from here, perhaps at a slower rate, but it will continue.

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Charles Hepworth

Investment Director
My Insights

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