Report Summary

August 2024

3 minute read

Note: This report summary is one or two months behind the current month as standard reporting practice. The content is indicative only and incomplete with certain data undisclosed. Subscribe to access this data or take out a free 30 day subscription trial now.

Inflation

Headline Inflation Unchanged: The Consumer Prices Index (CPI) increased by xx% YoY in August, unchanged from July, and in line with economists’ expectations. CPIH (which includes owner occupiers' housing costs) was also unchanged at xx%.

Core Inflation Edges Up: Core CPI, which excludes volatile items such as energy, food, alcohol, and tobacco, rose to xx% in August from xx% in July, slightly above economists' expectations (xx%).

Services Inflation Increases: The annual rate for CPI services inflation went up from xx% to xx%, indicating ongoing domestic inflationary pressures. However, the CPI goods annual rate fell deeper into negative territory, from -xx% to -xx%, showing continued deflation in goods prices.

Market Reaction: The pound rose following the inflation release, as expectations of a rate cut at the tomorrow’s rate-setting meeting subsided. Markets show that the odds of no change being made to bank rate have risen to xx% from xx% before the data was released.

Transport Costs Rise: Overall transport prices increased by xx% in the year to August, up from xx% in July. This was mainly due to a significant surge in air fares and a smaller impact from second-hand car prices.

Restaurants and Hotels Inflation Eases: The annual inflation rate for restaurants and hotels decreased to xx% in August (from xx% in July), reaching the lowest rate since July 2021. Notably, concerns about a "Taylor Swift effect" boosting hotel prices did not materialise.

Supply chain pressures ease: Producers' input prices fell by xx% YoY, helped by a drop in oil prices, which may help contain future consumer price inflation. Output inflation also weakened, rising by xx% YoY to August, down from xx% in July, suggesting easing inflationary pressures at the production level.

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Inflation remains unchanged at 2.2%