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| Version 1 | Version 2 |
|---|---|
| UK inflation dips to 1.8% in June | UK inflation dips to 1.8% in June |
| (21 minutes later) | |
| UK annual inflation fell in June as the Consumer Prices Index (CPI) dropped to 1.8% from 2.2% in May, the Office for National Statistics (ONS) said. | UK annual inflation fell in June as the Consumer Prices Index (CPI) dropped to 1.8% from 2.2% in May, the Office for National Statistics (ONS) said. |
| CPI, which met analysts' forecasts, fell because of lower food prices. | CPI, which met analysts' forecasts, fell because of lower food prices. |
| It is the first time since September 2007 that the CPI has been below the Bank of England's target of 2%. | |
| The Retail Prices Index (RPI), a key inflation figure which includes mortgage interest payments and housing costs, slowed to -1.6% from -1.1%. | The Retail Prices Index (RPI), a key inflation figure which includes mortgage interest payments and housing costs, slowed to -1.6% from -1.1%. |
| The RPI is now at its lowest since ONS records started in 1948. | The RPI is now at its lowest since ONS records started in 1948. |
| Consensus | Consensus |
| Lower prices for meat, milk and fruit last month were the main reason for the fall in inflation. | Lower prices for meat, milk and fruit last month were the main reason for the fall in inflation. |
| "A significant downward effect also came from furniture prices, which rose by less than last year," the ONS said. | |
| It also pointed to a large upward pressure on the CPI rate from the recreation and culture sector, with computer games in particular rising by more than a year ago. | |
| The CPI is far below what it was last September, when the rate hit 5.2% because of high oil and food prices. | The CPI is far below what it was last September, when the rate hit 5.2% because of high oil and food prices. |
| The Bank of England is now predicting CPI will fall below 1% this year, as the downturn hits demand and sends prices lower. | The Bank of England is now predicting CPI will fall below 1% this year, as the downturn hits demand and sends prices lower. |
| "The figures are bang on consensus," said economist Philip Shaw of Investec. | "The figures are bang on consensus," said economist Philip Shaw of Investec. |
| To call this a period of deflation would be totally wrong Philip Shaw, economist at Investec | |
| "We note that food prices fell back on the month and the increase in petrol prices was a little less than we'd factored in." | "We note that food prices fell back on the month and the increase in petrol prices was a little less than we'd factored in." |
| He added that the RPI measure was negative because of "aggressive" cuts in interest rates since last autumn. | He added that the RPI measure was negative because of "aggressive" cuts in interest rates since last autumn. |
| "To call this a period of deflation would be totally wrong." | "To call this a period of deflation would be totally wrong." |
| Interest rates are now at a record low of 0.5%. | Interest rates are now at a record low of 0.5%. |
| While analysts expect inflation to keep falling this year, they suggest inflation will pick up next year. |