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UK inflation remains in line with Bank of England target

UK inflation remained in line with the Bank of England's 2% year-on-year target last month, new figures from the Office for National Statistics showed on Wednesday.

The consumer price index rose 0.1% over the month of June, as expected, which meant the annual rise in CPI remained at 2.0% for the second month running, though the forecast was for it to ease to 1.9%.

Core CPI, which excludes more volatile prices such as food and fuel, also remained at 3.5% in June.

Services sector CPI, a key measure watched by the BoE’s monetary policy committee as an indicator of persistent inflation, stayed at 5.7%.

ONS chief economist Grant Fitzner said: "The inflation rate was unchanged in June. Hotel prices rose strongly while second-hand car costs fell but by less than this time last year. However, these were offset by falling clothing prices, with widespread sales driving down their cost.

"Meanwhile, the cost of both raw materials and goods leaving factories fell on the month, though factory gate prices remain above where they were a year ago."

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