Inflation flat in June but energy prices still up
Inflation dropped by 0.1pc in June compared with May but the year-on-year increase was 2.7pc.
The biggest hike was in energy prices which were up 9pc followed by goods and services while the main decrease was in the price of clothing and footwear which fell 5pc.
Excluding energy prices, inflation remained unchanged in the month and increased by 1.9pc annually.
And when mortgage interest was excluded, the fall was 0.2pc in June compared with May and 1.6pc year-on-year.
Prices at restaurants and hotels also increased but the cut in VAT to 9pc for the retail/hospitality sectors would not be reflected in these figures.
Meanwhile, euro inflation remained steady in June as energy costs retreated and a worsening debt crisis undermined economic growth.
The inflation rate in the 17-nation euro region rose 2.7pc from a year earlier, the same as in May, the European Union’s statistics office said today.
That’s in line with an initial estimate published on June 30 and above the European Central Bank’s 2pc limit for a seventh month.
European governments are stepping up spending cuts to fight the debt crisis while the ECB is continuing to fight inflation through interest rate increases.
New rate hikes are expected later this year.