UK consumer inflation climbed more than forecast last month, led by an increase in prices in the culture and recreation industry.
Consumer prices including owner occupiers’ housing costs rose 1.1 per cent in July from the previous year from a rate of 0.8 per cent in June, according to data from the Office for National Statistics. The rate of inflation was significantly higher than 0.7 per cent forecast by economists polled by Bloomberg.
The biggest contributor to the rise in inflation was culture and recreation, a category that includes computer games and that has been boosted by shifts in consumer habits caused by the pandemic.
Clothing, petrol, and furniture and household goods also contributed significantly to the rise in consumer prices, the ONS said.
Sterling climbed 0.2 per cent against the dollar to $1.326, hitting its highs of the day after the report that could come as a relief for Bank of England policymakers who have cut interest rates to historic lows in a bid to bolster the economy. The central bank targets an inflation rate of 2 per cent.