LONDON (AP) — Inflation in the U.K. has fallen by more than anticipated to a 15-month low, official figures showed Wednesday, a development that may ease the pressure for the Bank of England to raise interest rates sharply over the coming months.
The Office for National Statistics said that inflation, as measured by the consumer prices index, fell to 7.9% in the year to June from 8.7% the previous month. Economists had expected a more modest decline to 8.2%.
The statistics agency said the falling of fuel prices was the biggest driver behind the drop, while food price inflation also pared back, though they remained historically high.
Americans increased their spending last month as inflation eased in many areas, and the job market remained remarkably strong.
Asian shares are mixed after Wall Street’s frenzy around artificial intelligence helped pushed U.S. stocks to their best level in more than 15 months.
Scammers targeting investors are using fears of a recession and high inflation to put new wrappers on their ruses, but the underlying scams are still pretty much the same, says Andrew Hartnett.
The average long-term U.S. mortgage rate climbed this week to just under 7%, the highest level since November and the latest setback for homebuyers already grappling with a tough housing market constrained by a dearth of homes for sale.
Despite the decline, inflation is still running far higher than the Bank of England’s target rate of 2%. As a result, the central bank is expected to raise its main interest rate further at its upcoming meeting in early August. However, the bigger-than-expected fall may mean it only raises it by a quarter of a percentage to 5.25% rather than a half-point.
That may provide homeowners who are looking to get a new mortgage deal some comfort if the sharp upward pressure on mortgage rates starts to decline.
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