Britain’s inflation rate fell back to zero in June, led by prices for food and clothing, while the core measure dropped to match a 14-year low.
The stagnation in headline prices follows a 0.1 per cent increase in May and was in line with the median estimate in a Bloomberg survey of economists. The core rate fell to 0.8 per cent from 0.9 per cent, the same as April, which was the lowest since March 2001.
The data came as Bank of England Governor Mark Carney and other policy makers prepare to take questions from lawmakers on the economic outlook. While inflation is below the BOE’s two per cent target, officials are focused on the labor market, with data on Wednesday forecast to show that earnings are rising at the fastest pace in six years.
"Inflation is likely to stay close to zero for the next few months,” James Knightley, an economist at ING Bank in London, said before the data were published. “Nonetheless, the economy is growing briskly and the labor market is tightening. Wages are finally starting to respond."
The report on Tuesday from the Office for National Statistics showed that UK consumer prices were unchanged in June from May.
News by Bloomberg, edited by ESM
