Lower Airfares Help U.K. Inflation Ease to 2.8%
LONDON -- Official figures show inflation in the U.K. eased back slightly last month despite higher petrol prices.
The Office of National Statistics said Tuesday that consumer prices were 2.8% higher in the year to July, down from the 2.9% rate in June. Airfares and clothing were largely behind the monthly fall.
Howard Archer, chief European economist at IHS Global, says inflation should continue to fall in 2013, but that much will depend on oil prices -- as the economy hasn't strengthened enough to stoke inflationary pressure just yet.
Bank of England Gov. Mark Carney revealed last week that interest rates will not rise until unemployment has dropped below 7%, but underscored that the link to unemployment will be cut should inflation rise out of control.
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