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| Version 6 | Version 7 |
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| UK inflation dips to 1.8% in June | UK inflation dips to 1.8% in June |
| (2 days later) | |
| A key measure of inflation has fallen below the Bank of England's target rate of 2% for the first time since 2007. | A key measure of inflation has fallen below the Bank of England's target rate of 2% for the first time since 2007. |
| Lower food prices caused the Consumer Prices Index (CPI) to drop to an annual rate of 1.8% in June from 2.2% in May, official statistics showed. | Lower food prices caused the Consumer Prices Index (CPI) to drop to an annual rate of 1.8% in June from 2.2% in May, official statistics showed. |
| The Retail Prices Index (RPI) inflation measure, which includes mortgage interest payments and housing costs, also fell, 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. |
| The Bank of England aims to keep inflation at 2% to maintain price stability and more broadly, economic stability. | The Bank of England aims to keep inflation at 2% to maintain price stability and more broadly, economic stability. |
| 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. |
| INFLATION CALCULATOR Check your personal inflation rate | INFLATION CALCULATOR Check your personal inflation rate |
| "A significant downward effect also came from furniture prices, which rose by less than last year," the Office for National Statistics said. | "A significant downward effect also came from furniture prices, which rose by less than last year," the Office for National Statistics 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. | 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. |
| We could still see falling prices on the CPI measure in the next year... but that's not what most forecasters expect Stephanie Flanders, BBC economics editor Read Stephanie's blog | We could still see falling prices on the CPI measure in the next year... but that's not what most forecasters expect Stephanie Flanders, BBC economics editor Read Stephanie's blog |
| "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. |
| Interest rates are now at a record low of 0.5%. | Interest rates are now at a record low of 0.5%. |
| "To call this a period of deflation would be totally wrong," he said | "To call this a period of deflation would be totally wrong," he said |
| But not everyone agreed. | But not everyone agreed. |
| David Kern, head economist at the British Chambers of Commerce said: "The figures confirm the BCC's assessment that in the short-term, the main policy priority must be countering the risks posed by recession and deflation". | David Kern, head economist at the British Chambers of Commerce said: "The figures confirm the BCC's assessment that in the short-term, the main policy priority must be countering the risks posed by recession and deflation". |
| In the near future the BCC is urging the Bank of England to expand the scale of quantitative easing well beyond £125bn. | In the near future the BCC is urging the Bank of England to expand the scale of quantitative easing well beyond £125bn. |
| Having lowered interest rates sharply the government has aimed to increase the amount of money circulating to boost the economy, though quantitative easing. | Having lowered interest rates sharply the government has aimed to increase the amount of money circulating to boost the economy, though quantitative easing. |
| Stephen Bell, of hedge fund GLC, said: "Underlying inflation will remain low for some time, which is good news for home [loan] borrowers." | Stephen Bell, of hedge fund GLC, said: "Underlying inflation will remain low for some time, which is good news for home [loan] borrowers." |
| While it will be a "long hard struggle to recovery" he said the positive message was that the UK economy was recovering faster than other economies. | While it will be a "long hard struggle to recovery" he said the positive message was that the UK economy was recovering faster than other economies. |