CPI inflation was unchanged in July and is still being slow to fall compared with other countries. However, this primarily reflects the impact of the lower pound and this effect should now be easing. The more important influence on inflation over the coming months will be the large amount of spare capacity that is building up. Indeed, with pay growth still slowing, we continue to think that there is a significant risk of deflation further ahead.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services