The Office of National Statistics released August CPI and PPI figures which support the Bank of England’s view that deflation is “more likely than not”. The CPI grew by 0.2% in August, down from July’s figure of 0.1% and unchanged on a year on year basis. The less volatile core measure in August was 1.0% year on year, down from the comparable July figure of 1.2%. ANZ said the figures were in line with expectations and were the result of lower fuel prices. On the producer side, UK producer prices fell 1.8% in the year to August 2015, a larger fall than the comparable July figure of 1.6%. Core prices rose 0.1% in the year to August 2015, slightly less than the July figure of 0.2%. Earlier this year the BoE governor Mark Carney had said deflation during 2015 was “more likely than not” but it was expected to be temporary.
