uploads///UK Inflation in June

UK’s Inflation Showed No Improvement: Are Consumers Pessimistic?


Dec. 4 2020, Updated 3:53 p.m. ET

UK’s inflation in June

According to a report provided by the Office for National Statistics, on a monthly basis, the United Kingdom’s inflation index showed no improvement in June compared to May. It stood at 0.0% in June, compared to a 0.4% gain in May. However, it didn’t meet the market’s expectation of a 0.2% increase.

Similarly, the UK’s inflation in June remained unchanged compared to the previous month. It stood at 2.4% in June, compared to the same percentage in May. It was below the market’s expectation of a 2.6% increase and was the weakest figure since March 2017.

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Components of inflation

The UK’s inflation index in June was mainly due to the softer rise in prices of transportation, housing and utilities, and restaurants and hotels. However, the prices of food, non-alcoholic beverages, clothing and footwear, and miscellaneous goods and services declined in June.

Consumer demand in the retail and auto sectors, among others, showed no improvement as trade tensions heated up and impacted the economy’s demand outlook. The falling consumer demand affected the whole economy.

The United Kingdom’s FTSE 100 Index (UKX-INDEX) dropped 0.5% in June. Similarly, the iShares MSCI United Kingdom ETF (EWU) dropped 3.4% in June.

In the final part of this series, we’ll analyze the indicators that investors should watch next week.


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