The Pound plummeted yesterday morning after the inflation rate slipped to 2.6 percent in June giving the Bank of England policy makers breathing space after concerns price growth was getting out of hand.
The Office for National Statistics revealed the first drop in the annual rate since October. Economists had forecast that it would hold at the four-year high of 2.9 percent reached in May. The data revealed motor fuel and recreation items such as games were the main contributors to the lower inflation rate.
The figure undermines arguments for the immediate interest-rate hike that a minority of hawkish policy makers supported at the last BOE decision as inflation looked set to soar above the 2 percent target.
The pound’s fall since the Brexit vote has led to a pickup in prices. This data shows there are signs that pressure is now easing: import prices for factories slipped 0.2 percent on the month and the annual rate of gains slowed to 9.9 percent from 12.3 percent.
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