Inflation defies slowdown forecast to hit 2.1%

15th August 2019.

Inflation in Britain accelerated to 2.1% in July, driven by rises in the prices of computer games, toys, hotel rooms, clothing and shoes.

Economists had expected annual inflation to drop to 1.9% from 2% in June.

The rise has dampened expectations of a cut to interest rates.

Ruth Gregory, senior UK economist at Capital Economics, said she expects inflation to exceed the Bank of England’s 2% target for most of next year, pointing also to UK factories’ rising costs.