British inflation rate climbs to 0.5%

[LONDON] Britain's annual inflation rate rose last month from May, official data showed Tuesday, and faces further gains as a weak pound caused by the Brexit vote raises import prices.

The 12-month Consumer Price Index rose by 0.5 per cent in June, the Office for National Statistics said in a statement.

CPI had risen by 0.3 per cent in the year to May, the ONS added.

"Rises in air fares, prices for motor fuels and a variety of recreational and cultural goods and services were the main contributors to the increase in the rate," the ONS said.

"These upward pressures were partially offset by falls in the price of furniture and furnishings and accommodation services."

Howard Archer, chief UK economist at IHS Markit, said the pound's weakness appeared "set to increasingly feed through over the coming months to markedly push inflation higher as it raises prices for imported goods and services, oil and commodities".

The pound slumped to 31-year lows against the dollar after Britain voted on June 23 to exit the European Union. The currency has since recovered slightly.

AFP