UK firms waiting for Brexit to adjust prices: NIESR

Wednesday, 18. September 2019 13:31

The sharp decline in British consumer price inflation registered for last month shows hikes in the corporate sector were weaker than usual in seasonal terms, according to Jason Lennard, a senior economist at the National Institute of Economic and Social Research or NIESR. Companies "are probably waiting to see beyond" the Brexit deadline, set for October 31, "before adjusting prices," he added in a report published on Wednesday after the statistical release.

The core index grew only 1.5% in August on an annual scale, the least since November 2016 and 0.4 percentage points less than in the previous month. Retail price inflation slowed by 0.2 points to 2.6%, input producer price growth nosedived 1.7 points to a negative 0.8% and the output item skidded 0.3 points to 1.6%.

The institute noted the slowdown hit 10 out of 12 regions and that the trimmed mean inflation measure landed at only 1% but that its model implies 2.1% for August of next year.

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