Inflation in the UK fell to 7.9 per cent in the year to June, down from 8.7 per cent in May and the lowest rate in 15 months.
Analysts had forecast a drop to 8.2 per cent.
On a monthly basis, the Consumer Prices Index rose by 0.1 per cent in June, compared with a rise of 0.8 per cent in June 2022, according to the Office for National Statistics.
Core inflation, which excludes items such as energy, food and tobacco, rose by 6.9 per cent in the year to June, down from 7.1 per cent in May, which was the highest rate since March 1992.
Falling prices for motor fuels provided the largest downward pressure on the inflation figures.
Petrol and diesel prices fell 22.7 per cent in the year to June, compared with a fall of 13.1 per cent in May. The average price per litre of petrol in June was £1.43 ($1.84) . In the same month last year, the average price per litre of petrol was £1.84.
Although food prices rose again in June, it was by less than in the same month last year.
The annual rate of food price inflation was 17.4 per cent in June 2023, down from 18.4 per cent in May and lower than the 45-year peak of 19.2 per cent it reached in March 2023.
“Inflation is falling and stands at its lowest level since last March; but we aren't complacent,” UK Chancellor Jeremy Hunt said.
Stuart Cole, chief macro economist at Equiti told The National: “It is the fall in the core rate that will probably be most welcomed by the Bank of England, given that since March it has been steadily climbing higher, despite the policy tightening the Monetary Policy Committee has delivered.
“Today’s numbers will allow the Bank of England to claim that its aggressive stance is finally starting to yield results.”
'Still work to be done'
Economists are now wondering if the larger-than-expected fall eases the pressure on the Bank of England to keep aggressively raising interest rates, after 13 consecutive rate rises since December 2021.
“In normal circumstances, this could signal an easing monetary policy from the Bank of England with inflation moving in the right direction, but with the 2 per cent target in mind, this latest release represents victory in one battle, but not the war,” said Richard Hunter, head of markets at Interactive Investor.
In that war against inflation, not all are convinced the current numbers have fallen enough for the Bank of England to review its monetary tightening policy.
“Despite the data showing that the battle against inflation in the UK is being won, we expect the Bank of England will confirm it’ll continue with its aggressive interest rate hiking agenda at the monetary policy meeting on August 1,” said Nigel Green, chief executive at the financial consultants deVere.
“Although the consumer price index fell to 7.9 per cent last month, amid lower petrol prices and a slowdown in the pace of growth for food, beverages and other basics, the central bank officials will likely argue that there is still work to be done.
“We believe the bank will insist that although inflation is certainly coming down, it is doing so very, very gradually. It remains sticky – still the highest in the G7 – and a long way from the 2 per cent target.”
Jeremy Batstone-Carr at Raymond James in London agrees that while the June figures did not deliver any “nasty surprises”, prices are still “too elevated for the Bank of England to sit back and relax”.
At 7.9 per cent, UK inflation is still way above the Bank of England's 2 per cent target, but significantly below the 11.1 per cent 41-year high it hit last October.
So, when the Monetary Policy Committee at the Bank of England decides on the next move in interest rates in early August, analysts are divided on predictions of a 0.5 per cent raise or a smaller 0.25 per cent increase.
“I think the BoE could justify [either] move,” Mr Cole at Equiti told The National.
“Nobody would criticise it for only going for a 0.25 per cent rise, particularly given that the impact of the monetary tightening delivered to date is yet to be fully felt.
“But the MPC will be acutely aware of the strong wages growth numbers we saw last week and may decide that a 0.5 per cent hike is therefore justified, if only as an insurance policy to ensure that CPI does not start creeping higher again, akin to what happened with the core reading this year.”
Signals from the elements of the derivatives markets that closely watch the meetings of the Bank of England have reduced the chances of a 0.5 per cent increase in interest rates in early August to 50 per cent.
The inflation figures “are likely to make the bank think twice about a second consecutive 0.5 percentage point hike when its Monetary Policy Committee meets”, Dr Mohamed El-Erian, economic adviser at Allianz and president of Queens’ College, Cambridge told The National.
“Indeed, the data release has already prompted traders to reprice the future interest-rate curve in favour of 0.25 percentage points.”
Longer term, the money markets are also pricing in a peak for interest rates at 5.9 per cent, compared with a prediction of over 6.5 per cent earlier this month.
Pound down
In response to the inflation numbers, the pound was down 0.8 per cent at $1.2927 against the US dollar, while the euro rose more than 0.7 per cent against sterling to 86.82 pence.
“Profit taking in sterling as a result should not be a surprise as we expect gilt yields to come down versus US treasuries and bonds,” said Kenneth Broux, head of corporate research FX and rates at Societe Generale in London. “The pound was overbought after the run-up in recent weeks.”
Meanwhile, shares in Britain's big housebuilders rose on the back of adjusted future interest-rate expectations.
Shares in Crest Nicholson soared by 7 per cent by mid-morning on Wednesday, while those in Barratt Developments and Taylor Wimpey were more than 5 per cent higher.
"Sentiment surrounding housebuilders has been hinging on the direction of inflation and interest rates, and concerns that affordability is being sideswiped as mortgages become much more expensive, so any signs that homeowners might show more resilience is being welcomed," said Susannah Streeter at Hargreaves Lansdown.
Households still suffering
Even though the figures show the 13 rises in interest rates may be starting to have an effect on sticky inflation, prices rising at 7.9 per cent will come as scant comfort to already embattled household budgets.
“Relief that the numbers finally seem to be going in the right direction will be short lived for policymakers and politicians who understand that the average household won’t care about cooling inflation, they just want prices to go down, and with one or two exceptions we’re still a fair way away from that,” said Danni Hewson, head of financial analysis at AJ Bell.
For Alice Haine, personal finance analyst at Bestinvest, falling inflation is “good news”, but consumers should remember that “a typical basket of goods is still almost 8 per cent more expensive than it was a year ago”.
“With rate rises still on the cards, some households face significant financial pain when their fixed-rate mortgages mature, and they have to absorb alarmingly higher repayments.
“The cost-of-living crisis is now being overtaken by a cost-of-borrowing crisis, with mortgages taking the lead as the major personal finance concern of the moment,” Ms Haine added.
For some, any chance that the Bank of England's interest rate gallop might be reined in slightly will be good news for mortgage holders.
“I’m going out on a limb here to say fixed mortgage rates have peaked,” said Lewis Shaw, founder of the mortgage broker Shaw Financial Services.
“That doesn’t mean that we’re out of the woods because monetary policy takes a long time to show up. However, it does mean we can now start to see the faint glimmer of a light at the end of the tunnel.”
Others are more cautious.
“If this is a trend, then we should start to see some easing of pricing, but let's not get too carried away just yet,” said Jonathan Burridge, founding adviser at We Are Money.
“Inflation is still too high, so the Bank of England's rate policy is unlikely to change and traders have responded ahead of this news, so any adjustment will be slow and incremental.”
Overall, many analysts pointed out that while the fall in the inflation numbers is not bad news for households, there is little to be positive about.
“While it is positive to see inflation falling, it remains stuck above 7 per cent for the 16th consecutive month," said Ben Harrison, director of the Work Foundation at Lancaster University.
“This is prolonging the living standards squeeze that has been a particular disaster for the 6.2 million people in severely insecure work.
“These latest inflation figures will put the Bank of England under pressure to keep interest rates high. Any further mortgage and rent hikes could be a hammer blow for those stuck in insecure and low-paid work.”
PREMIER LEAGUE FIXTURES
Tuesday (UAE kick-off times)
Leicester City v Brighton (9pm)
Tottenham Hotspur v West Ham United (11.15pm)
Wednesday
Manchester United v Sheffield United (9pm)
Newcastle United v Aston Villa (9pm)
Norwich City v Everton (9pm)
Wolves v Bournemouth (9pm)
Liverpool v Crystal Palace (11.15pm)
Thursday
Burnley v Watford (9pm)
Southampton v Arsenal (9pm)
Chelsea v Manchester City (11.15pm)
Dengue%20fever%20symptoms
%3Cp%3EHigh%20fever%20(40%C2%B0C%2F104%C2%B0F)%3Cbr%3ESevere%20headache%3Cbr%3EPain%20behind%20the%20eyes%3Cbr%3EMuscle%20and%20joint%20pains%3Cbr%3ENausea%3Cbr%3EVomiting%3Cbr%3ESwollen%20glands%3Cbr%3ERash%26nbsp%3B%3C%2Fp%3E%0A
Farage on Muslim Brotherhood
Nigel Farage told Reform's annual conference that the party will proscribe the Muslim Brotherhood if he becomes Prime Minister.
"We will stop dangerous organisations with links to terrorism operating in our country," he said. "Quite why we've been so gutless about this – both Labour and Conservative – I don't know.
“All across the Middle East, countries have banned and proscribed the Muslim Brotherhood as a dangerous organisation. We will do the very same.”
It is 10 years since a ground-breaking report into the Muslim Brotherhood by Sir John Jenkins.
Among the former diplomat's findings was an assessment that “the use of extreme violence in the pursuit of the perfect Islamic society” has “never been institutionally disowned” by the movement.
The prime minister at the time, David Cameron, who commissioned the report, said membership or association with the Muslim Brotherhood was a "possible indicator of extremism" but it would not be banned.
Quick pearls of wisdom
Focus on gratitude: And do so deeply, he says. “Think of one to three things a day that you’re grateful for. It needs to be specific, too, don’t just say ‘air.’ Really think about it. If you’re grateful for, say, what your parents have done for you, that will motivate you to do more for the world.”
Know how to fight: Shetty married his wife, Radhi, three years ago (he met her in a meditation class before he went off and became a monk). He says they’ve had to learn to respect each other’s “fighting styles” – he’s a talk it-out-immediately person, while she needs space to think. “When you’re having an argument, remember, it’s not you against each other. It’s both of you against the problem. When you win, they lose. If you’re on a team you have to win together.”
SPEC%20SHEET%3A%20APPLE%20M3%20MACBOOK%20AIR%20(13%22)
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Sreesanth's India bowling career
Tests 27, Wickets 87, Average 37.59, Best 5-40
ODIs 53, Wickets 75, Average 33.44, Best 6-55
T20Is 10, Wickets 7, Average 41.14, Best 2-12
Our Time Has Come
Alyssa Ayres, Oxford University Press
How green is the expo nursery?
Some 400,000 shrubs and 13,000 trees in the on-site nursery
An additional 450,000 shrubs and 4,000 trees to be delivered in the months leading up to the expo
Ghaf, date palm, acacia arabica, acacia tortilis, vitex or sage, techoma and the salvadora are just some heat tolerant native plants in the nursery
Approximately 340 species of shrubs and trees selected for diverse landscape
The nursery team works exclusively with organic fertilisers and pesticides
All shrubs and trees supplied by Dubai Municipality
Most sourced from farms, nurseries across the country
Plants and trees are re-potted when they arrive at nursery to give them room to grow
Some mature trees are in open areas or planted within the expo site
Green waste is recycled as compost
Treated sewage effluent supplied by Dubai Municipality is used to meet the majority of the nursery’s irrigation needs
Construction workforce peaked at 40,000 workers
About 65,000 people have signed up to volunteer
Main themes of expo is ‘Connecting Minds, Creating the Future’ and three subthemes of opportunity, mobility and sustainability.
Expo 2020 Dubai to open in October 2020 and run for six months
Where to donate in the UAE
The Emirates Charity Portal
You can donate to several registered charities through a “donation catalogue”. The use of the donation is quite specific, such as buying a fan for a poor family in Niger for Dh130.
The General Authority of Islamic Affairs & Endowments
The site has an e-donation service accepting debit card, credit card or e-Dirham, an electronic payment tool developed by the Ministry of Finance and First Abu Dhabi Bank.
Al Noor Special Needs Centre
You can donate online or order Smiles n’ Stuff products handcrafted by Al Noor students. The centre publishes a wish list of extras needed, starting at Dh500.
Beit Al Khair Society
Beit Al Khair Society has the motto “From – and to – the UAE,” with donations going towards the neediest in the country. Its website has a list of physical donation sites, but people can also contribute money by SMS, bank transfer and through the hotline 800-22554.
Dar Al Ber Society
Dar Al Ber Society, which has charity projects in 39 countries, accept cash payments, money transfers or SMS donations. Its donation hotline is 800-79.
Dubai Cares
Dubai Cares provides several options for individuals and companies to donate, including online, through banks, at retail outlets, via phone and by purchasing Dubai Cares branded merchandise. It is currently running a campaign called Bookings 2030, which allows people to help change the future of six underprivileged children and young people.
Emirates Airline Foundation
Those who travel on Emirates have undoubtedly seen the little donation envelopes in the seat pockets. But the foundation also accepts donations online and in the form of Skywards Miles. Donated miles are used to sponsor travel for doctors, surgeons, engineers and other professionals volunteering on humanitarian missions around the world.
Emirates Red Crescent
On the Emirates Red Crescent website you can choose between 35 different purposes for your donation, such as providing food for fasters, supporting debtors and contributing to a refugee women fund. It also has a list of bank accounts for each donation type.
Gulf for Good
Gulf for Good raises funds for partner charity projects through challenges, like climbing Kilimanjaro and cycling through Thailand. This year’s projects are in partnership with Street Child Nepal, Larchfield Kids, the Foundation for African Empowerment and SOS Children's Villages. Since 2001, the organisation has raised more than $3.5 million (Dh12.8m) in support of over 50 children’s charities.
Noor Dubai Foundation
Sheikh Mohammed bin Rashid Al Maktoum launched the Noor Dubai Foundation a decade ago with the aim of eliminating all forms of preventable blindness globally. You can donate Dh50 to support mobile eye camps by texting the word “Noor” to 4565 (Etisalat) or 4849 (du).
Manchester United v Liverpool
Premier League, kick off 7.30pm (UAE)
The%20specs
%3Cp%3E%3Cstrong%3EEngine%3A%3C%2Fstrong%3E%201.5-litre%204-cylinder%3Cbr%3E%3Cstrong%3ETransmission%3A%20%3C%2Fstrong%3ECVT%3Cbr%3E%3Cstrong%3EPower%3A%20%3C%2Fstrong%3E119bhp%3Cbr%3E%3Cstrong%3ETorque%3A%20%3C%2Fstrong%3E145Nm%3Cbr%3E%3Cstrong%3EPrice%3A%20%3C%2Fstrong%3EDh%2C89%2C900%20(%2424%2C230)%3Cbr%3E%3Cstrong%3EOn%20sale%3A%20%3C%2Fstrong%3Enow%3C%2Fp%3E%0A
Our legal columnist
Name: Yousef Al Bahar
Advocate at Al Bahar & Associate Advocates and Legal Consultants, established in 1994
Education: Mr Al Bahar was born in 1979 and graduated in 2008 from the Judicial Institute. He took after his father, who was one of the first Emirati lawyers
UEFA CHAMPIONS LEAGUE FIXTURES
All kick-off times 10.45pm UAE ( 4 GMT) unless stated
Tuesday
Sevilla v Maribor
Spartak Moscow v Liverpool
Manchester City v Shakhtar Donetsk
Napoli v Feyenoord
Besiktas v RB Leipzig
Monaco v Porto
Apoel Nicosia v Tottenham Hotspur
Borussia Dortmund v Real Madrid
Wednesday
Basel v Benfica
CSKA Moscow Manchester United
Paris Saint-Germain v Bayern Munich
Anderlecht v Celtic
Qarabag v Roma (8pm)
Atletico Madrid v Chelsea
Juventus v Olympiakos
Sporting Lisbon v Barcelona
Mica
Director: Ismael Ferroukhi
Stars: Zakaria Inan, Sabrina Ouazani
3 stars
SERIE A FIXTURES
Saturday (All UAE kick-off times)
Cagliari v AC Milan (6pm)
Lazio v Napoli (9pm)
Inter Milan v Atalanta (11.45pm)
Sunday
Udinese v Sassuolo (3.30pm)
Sampdoria v Brescia (6pm)
Fiorentina v SPAL (6pm)
Torino v Bologna (6pm)
Verona v Genoa (9pm)
Roma V Juventus (11.45pm)
Parma v Lecce (11.45pm)
The National Archives, Abu Dhabi
Founded over 50 years ago, the National Archives collects valuable historical material relating to the UAE, and is the oldest and richest archive relating to the Arabian Gulf.
Much of the material can be viewed on line at the Arabian Gulf Digital Archive - https://www.agda.ae/en
Teams
Punjabi Legends Owners: Inzamam-ul-Haq and Intizar-ul-Haq; Key player: Misbah-ul-Haq
Pakhtoons Owners: Habib Khan and Tajuddin Khan; Key player: Shahid Afridi
Maratha Arabians Owners: Sohail Khan, Ali Tumbi, Parvez Khan; Key player: Virender Sehwag
Bangla Tigers Owners: Shirajuddin Alam, Yasin Choudhary, Neelesh Bhatnager, Anis and Rizwan Sajan; Key player: TBC
Colombo Lions Owners: Sri Lanka Cricket; Key player: TBC
Kerala Kings Owners: Hussain Adam Ali and Shafi Ul Mulk; Key player: Eoin Morgan
Venue Sharjah Cricket Stadium
Format 10 overs per side, matches last for 90 minutes
Timeline October 25: Around 120 players to be entered into a draft, to be held in Dubai; December 21: Matches start; December 24: Finals
The Case For Trump
By Victor Davis Hanson
Our legal columnist
Name: Yousef Al Bahar
Advocate at Al Bahar & Associate Advocates and Legal Consultants, established in 1994
Education: Mr Al Bahar was born in 1979 and graduated in 2008 from the Judicial Institute. He took after his father, who was one of the first Emirati lawyers
AndhaDhun
Director: Sriram Raghavan
Producer: Matchbox Pictures, Viacom18
Cast: Ayushmann Khurrana, Tabu, Radhika Apte, Anil Dhawan
Rating: 3.5/5
PROFILE OF SWVL
Started: April 2017
Founders: Mostafa Kandil, Ahmed Sabbah and Mahmoud Nouh
Based: Cairo, Egypt
Sector: transport
Size: 450 employees
Investment: approximately $80 million
Investors include: Dubai’s Beco Capital, US’s Endeavor Catalyst, China’s MSA, Egypt’s Sawari Ventures, Sweden’s Vostok New Ventures, Property Finder CEO Michael Lahyani
COMPANY%20PROFILE
%3Cp%3E%3Cstrong%3ECompany%20name%3C%2Fstrong%3E%3A%20ASI%20(formerly%20DigestAI)%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStarted%3A%3C%2Fstrong%3E%202017%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EFounders%3A%3C%2Fstrong%3E%20Quddus%20Pativada%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20Dubai%2C%20UAE%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EIndustry%3A%3C%2Fstrong%3E%20Artificial%20intelligence%2C%20education%20technology%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EFunding%3A%3C%2Fstrong%3E%20%243%20million-plus%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EInvestors%3A%3C%2Fstrong%3E%20GSV%20Ventures%2C%20Character%2C%20Mark%20Cuban%3C%2Fp%3E%0A
A Cat, A Man, and Two Women
Junichiro Tamizaki
Translated by Paul McCarthy
Daunt Books
The biog
Prefers vegetables and fish to meat and would choose salad over pizza
Walks daily as part of regular exercise routine
France is her favourite country to visit
Has written books and manuals on women’s education, first aid and health for the family
Family: Husband, three sons and a daughter
Fathiya Nadhari's instructions to her children was to give back to the country
The children worked as young volunteers in social, education and health campaigns
Her motto is to never stop working for the country
