Inflation in the UK was close to the lowest level in more than fifty years last month, influenced by the lower cost of summer clothes and food, according to recently released data.
Felled by the aftermath of the nosedive in oil prices in Q3 and Q4 last year, consumer prices inflation in the UK experienced a year-on-year drop for the first time since 1960. The latest figures to be released show that it fell to 0% during June, following its foray into positive ground the previous month, as many economists had predicted.
The Office for National Statistics (ONS), have observed that looked at from a monthly perspective, inflation remained level.
Mark Carney, the Governor of the Bank of England, has gone on record as saying he believes prices will rise as the year progresses and oil prices become less of an influence. He anticipates that inflation will hit its target of 2% by the first few months of 2017.
However, a separate measure of inflation, which does not include rises in tobacco, alcohol and food pricing, dropped to 0.8% last month, suggesting that cheaper oil may be having a knock-on effect on the prices of other services.
The Bank of England has been clear that it believes the historically low levels of inflation will boost the UK economy, by increasing the spending capacity of many households, but will have a limited influence on the setting of both pricing and wages domestically.
Wages in the UK have risen over the last year and are predicted to stay on this trajectory in the short to medium term.
Negative influences on inflation are expected to continue for some time yet. The price of Brent crude oil dropped by roughly $2 per barrel during June, and has continued to fall this month.