Bringing you live news and features since 2006 

Anna Stupnytska

UK inflation will continue heading higher


Anna Stupnytska (pictured), Global Economist at Fidelity International comments on the latest UK inflation figures…  

UK headline CPI inflation was 0.6 per cent year-on-year in July, up from 0.50 per per cent in June. UK inflation should continue heading higher in the coming months, as the weak pound pushes up the cost of imports further. The extent of sterling depreciation seen thus far, around 18 per cent in trade-weighted term since the end of 2015, could boost inflation by more than 1 per cent, with the peak likely to occur in 2017.
As the Bank of England announced in August, they are intending to look through higher inflation overshooting the target of 2 per cent and keep monetary policy loose to help the economy navigate through the Brexit-related uncertainty. For savers, this results in a ‘double whammy’, as rising inflation and falling yields eat away their savings. For consumers, rising inflation will lead to higher spending on everyday items including food.
This reflects further bad news for the UK economy, with NIESR estimating a 0.2 per cent month-on-month contraction in GDP for July (around 2 per cent annualised). While this remains only an estimate for now, we begin to get the first hard data on the economy later this week, with the release of the unemployment report on Wednesday and retail sales on Thursday. I expect the hard data to start picking up the collapse in confidence survey in the aftermath of the referendum, at least to some extent. With the Brexit negotiations likely to last for some time, the related drag on growth will weigh on the economy over the next few months, despite the easy monetary policy and a potential fiscal boost likely to be announced in the Autumn budget.

Latest News

Morningstar has published a review of the European ETF market for the first quarter 2024, which finds that it gathered..
ETF data consultant ETFGI reports that assets invested in the global ETF industry reached a new record of USD12.71 trillion..
Calastone has published an ETF white paper which examines several of the processes that take place across the lifecycle of..
Adapting product lines to fit into changing methodologies and meet shifting demand is essential to remaining relevant in the industry..

Related Articles

Kristen Mierzwa, FTSE Russell
Index Investments Group (IIG), a division within index provider FTSE Russell, has extended its range of indices through two new...
US ETF issuers of active ETFs are facing an increase in fees from the big custodian firms, such as Charles...
Taylor Krystkowiak, Themes ETFs
Themes ETFs opened its doors in December 2023, with an introductory suite of 11 ETFs – seven thematic and four...
Konrad Sippel, Solactive
At the end of March, financial index specialist, Solactive, published its 2024 annual report on future trends.  ...
Subscribe to the ETF Express newsletter

Subscribe for access to our weekly newsletter, newsletter archive, updates on the site and exclusive email content.

Marketing by