CPI halts at 1.8% in July
18th August 2009
Consumer Price Index (CPI) inflation remained at 1.8 per cent in July - the same as the previous month.
The figure is below the government's target of two per cent and is contrary to predictions by economists that the CPI would actually decline in June.
Downward pressure from the food and non-alcoholic beverages sectors have exerted some of the greatest downward pressure on the annual CPI rate, according to the Office of National Statistics data.
Pressure from the hospitality industry is also impacting on the downward trend.
Economist at Capital Economics Vicky Redwood suggested that inflation in the UK has been slower to fall than elsewhere.
She said: 'We think that inflation will probably get a touch below one per cent towards the end of this year, but then it could get down to zero or even negative figures towards the end of 2010 or 2011.'
Meanwhile, the Retail Price Index, which excludes the mortgage rate, increased to -1.4 per cent in July, compared to -1.6 per cent in June.