British consumer price inflation unexpectedly held steady in July, official data showed today, confounding expectations of another fall with upward effects from computer games, DVDs and furniture prices.
The Office for National Statistics said consumer prices were unchanged on the month in July, keeping the annual rate at 1.8 per cent. Analysts had predicted a further easing below the 2 per cent target to 1.5 per cent.
Inflation has repeatedly surprised on the upside in recent months despite the worst recession for decades but policymakers still expect the CPI rate to fall below 1 per cent this year.
As such, for now the stronger than expected figures are unlikely to alter expectations that monetary policy will remain loose for some time to come.
The chief upward impact on CPI came from the recreation and culture sector, specifically the prices of computer games, DVDs and CDs.
There was also upward pressure from furniture prices because of less aggressive discounting in the July sales but the ONS said this was probably a result of prices not going up as steeply as they usually do in June.
Clothing and footwear prices also had a small upward impact while the chief downward influence came from food and non-alcoholic drink prices.
Reuters