LONDON (Reuters) – Consumer prices in Britain rose last month at the slowest rate since December 2016, a pre-Brexit boost to the spending power of households who are also seeing the fastest wage growth in 11 years.
Prices of goods and services paid by consumers rose at an annual rate of 1.7% in August after a 2.1% increase in July, the Office for National Statistics (ONS) said. A Reuters poll of economists had pointed to a rate of 1.9%.
ONS - Figures - House - Prices - July
Separate ONS figures showed British house prices rose in July by just 0.7% in annual terms, the smallest rise since 2012, as weakness in the London market spread to other parts of England.
Overall, the surprisingly sharp fall in inflation should boost households whose spending has fuelled the economy while businesses cut investment ahead of the Oct. 31 deadline for leaving the European Union.
Inflation - Rate - August - ONS - Statistician
“The inflation rate has fallen noticeably into August, to its lowest since late 2016,” ONS statistician Mike Hardie said.
“This was mainly driven by a decrease in computer game prices, plus clothing prices rising by less than last year after the end of the summer sales.”
Drop - Rate - Inflation - Month
It was the biggest drop in the annual rate of inflation from one month to another since late 2014.
Last month the Bank of England forecast that inflation would fall to a three-year low below 1.6% in the final quarter of this year, reflecting lower oil prices and government caps on household energy bills.
Fall - Value - Sterling - Boris - Johnson
This is despite a sharp fall in the value of sterling since Boris Johnson became prime minister with the...
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