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Official national statistics showed on Wednesday that UK inflation held steady at the Bank of England’s 2% target in June.
Economists polled by Reuters said the overall figure was 1.9%, higher than analysts’ expectations and in line with May’s 2% reading.
Sterling rose slightly shortly after the news, trading at $1.2977 at 7:21 a.m. London time.
In view of the dominant position of the service industry in the British economy and its reflection on domestic price increases, the Bank of England pays close attention to services industry inflation, which remained at 5.7% in June.
Core inflation, which excludes energy, food, alcohol and tobacco, was 3.5%, also unchanged from May’s 3.5%.
The ONS said rising prices in restaurants and hotels were the biggest contributor to upward pressure, while clothing and footwear costs fell the most.
This is the first reading since the UK general election on July 4 but does not reflect a change of government. Britain’s new finance minister, Darren Jones, said in a statement that prices are still too high.
“We face the legacy of fourteen years of chaos and economic irresponsibility. That’s why this government is taking the tough decisions now to repair the foundations so that we can rebuild Britain and make it better across the country,” he said said Wednesday.
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