World Bulletin / News Desk
British inflation unexpectedly rose in July, damaging hopes that easing price pressures would allow Britons to help the recession-hit economy with higher spending, but leaving expectations for more central bank stimulus intact for now.
Consumer price inflation inched up to 2.6 percent from 2.4 percent in June as prices for airfares soared and clothing retailers reined in seasonal discounts, the Office for National Statistics said on Tuesday, confounding economists' forecasts for a fall and posting the first rise since March.
Last week, the Bank of England slashed its inflation forecast, seeing inflation nearly back at its 2-percent target by the end of this year.
Analysts said the July figures were bucking a broader trend.
"We really need to take the June and July figures together and this implies that the downward trend in prices remains in place," James Knightley, an economist at ING, said.
"The rise in oil prices and food commodities presents some risks for headline inflation in coming months, but with the weak economy implying only limited corporate pricing power we still expectinflation to fall below 2 percent by the end of the year," he added.
UK bond futures briefly fell on the news and the pound rose to a 2-week high against the dollar.
The ONS said that airfares jumped 21.7 percent on the month, the largest rise from June to July since 2004.
The monthly fall in clothing and footwear prices was the smallest June to July drop since records started in 1996 as retailers had started seasonal discounts in June due to unusually wet weather.
A fall in inflation is seen as a crucial ingredient for a recovery from the recession the economy tipped into around the turn of the year.
"Inflation has halved since its peak in September but any increase is disappointing," a finance ministry spokesman said. "The government knows how tough things are for families at the moment."
Many Britons have experienced the worst squeeze in living standards in over 30 years and scaled back spending as higher taxes and rising prices have eaten up meagre wage increases.
Inflation has fallen sharply from the three-year peak of 5.2 percent hit in September 2011, and June's fall had been much sharper than expected, driven in part by the early summer sales.
The ONS said the fall in clothes prices between May and July was overall similar to previous years.
The central bank predicts a further fall to around 1.7 percent in two years time, indicating that it had room to add more stimulus once the current programme to buy 50 billion pounds of government bonds ends in November.
Core consumer price inflation, which strips out volatile components such as food and fuel, also rose to 2.3 percent from 2.1 percent, casting further doubt on whether inflation will fall much further.
In a separate release the ONS said house prices in Britain rose by 2.3 percent on the year in June, the same as in May, driven by a 6.5 percent annual house price increase in London.
However, a survey by the Royal Institution of Chartered Surveyors showed on Tuesday that Britishhouse prices experienced their most widespread falls for a year in the three months to July, and surveyors do not expect the outlook to improve over the next 12 months.
The uncertainty comes at a bad time for the 18 countries in the euro zone, whose economy is already in the doldrums.
"Kalashnikov regrets that consumers are faced with such a problem," said spokeswoman Yekaterina Boni.
Cairo and Khartoum had earlier accepted a proposal by Addis Ababa to hold the talks in Sudan in the third week of August.
Discounting the bulk of Japan's 48 reactors due to their long-term outage, the report said the number of operating units in the world has fallen to 388, 50 less than the peak in 2002.
The United Kalavrvta tanker, carrying some 1 million barrels of crude worth about $100 million, arrived off the coast of Texas on Saturday but has yet to unload its disputed cargo.
Over 200,000 NUMSA-affiliated metalworkers declared a nationwide strike on July 1 to demand a 15-percent pay raise for laborers and a ban on labor brokers
The council said in a statement that any trade in oil ISIL or Nusra Front, would violate United Nations sanctions as both groups have been blacklisted.
The project is being implemented in collaboration with the Ethiopian and Norwegian governments at a cost of over $2.8 million.
Kerry will be heading the U.S. team at the annual Strategic Dialogue with India on Thursday, and will be accompanied by U.S. Commerce Secretary Penny Pritzker.
A total of $610.6 million has been allocated for the implementation of the Ethiopian part of the project, with the funds coming from the Ethiopian government, international financial institutions and donor organizations.
Cukurova Holding to pay back $1.57 billion loan to rival shareholder Alfa by August 1, or face losing control of mobile phone operator
In March, Sweden was among the donor countries that had announced aid cuts to Uganda after the signing of the anti-homosexuality law
A Moscow court told Reuters a regional branch of Rospotrebnadzor had asked it to declare production and sales of some McDonald's products illegal after the watchdog agency carried out inspections of McDonald's restaurants last June.
Although the likely consumer is Europe, which would require pipelines to pass through Turkey, companies may decide instead to export gas from the Levant basin to Jordan, Egypt or the Asian continent.
The ambassadors did agree to add more people and entities to the EU's asset freeze list, using expanded criteria including Russian companies that help to undermine Ukraine's sovereignty
Washington has pressured companies and governments not to buy crude from the Kurdish Regional Government (KRG), but it has stopped short of banning U.S. firms from buying it outright.