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British inflation drops back to zero in June

Xinhua, July 14, 2015 Adjust font size:

Britain's consumer prices index (CPI) fell back to zero growth in the year to June 2015, from 0.1 percent in May 2015, data from the Office for National Statistics (ONS) showed Tuesday.

The CPI rate has been hovering around zero since February, and entered deflation in April for the first time on record. However, the rate rose 0.1 percent in May.

Mark Carney, Bank of England governor, said he expects inflation to remain low in the short term.

Falls in clothing and food prices were the main contributors to the change in the rate along with smaller rises in air fares than a year ago, the ONS said.

Besides, there were no large upward effects to offset the change, said the ONS.

CPIH, an inflation gauge including consumer prices and owner occupier's housing costs, increased 0.3 percent in the year to June 2015, down from 0.4 percent a month previous, data also showed.

"June's consumer prices figures showed that the UK is continuing to benefit from a period of very low inflation brought on by lower energy and import prices. There are still no signs that low inflation reflects a more general economic malaise," said Samuel Tombs, senior British economist at Capital Economics.

"There is a good chance that we will see inflation turn negative again over the next couple of months. Inflation is likely to pick up from the latter part of this year, once the sizeable base effects caused by the collapse in oil prices begin to kick in," said Martin Beck, senior economic advisor to the EY ITEM Club.

"However, the absence of underlying inflationary pressures suggests that the headline rate will remain some way short of the 2.0 percent target in 2016," Beck added. Endit