BoE faces 'tough decision on rates' as UK CPI stands firm at 2%

Reduces chances of rate hike

UK inflation remained static at 2% last month, as the Office for National Statistics (ONS) revealed a raft of downward contributors to the consumer prices index (CPI).

The ONS said motor fuels, accommodation services and electricity, gas and other fuels saw average prices shrink, but these were offset by price rises in clothing and food between May and June. Meanwhile, the CPI including owner occupiers' housing costs (CPIH) 12-month inflation rate was 1.9% in June 2019, also unchanged from the previous month. Phil Smeaton, chief investment officer at Sanlam UK, said economic growth slowing should alleviate inflationary pressures in the short term but he added that central bank reactions - looking to prematurely ease policy, combined with ongoing def...