UK inflation higher than expectations – TDS

Research Team at TDS, notes that the UK June inflation came in higher than both we and markets expected, with headline inflation at 0.5% y/y and core inflation at 1.4%.

Key Quotes

“Key contributors to both measures were transport and recreation & culture. Airfares in particular surged, with the largest May-to-June increase on record, likely reflecting travel costs to the Euro football championships. Computer games were also a key contributor to the increase in recreation & culture prices. It’s important to note that the inflation data was collected before the EU Referendum on 23 June, and so does not reflect the sudden depreciation in the exchange rate that occurred on 24 June.”