US sees unexpected slowdown, UK witnesses rise

(MENAFN) Recent inflation figures from the US and UK present contrasting trends, reflecting divergent economic conditions in both regions. In the United States, inflation figures for July revealed a surprising slowdown, with the annual rate dropping to 2.9 percent from 3 percent in June. This marks the fourth consecutive month of deceleration, which is more favorable than the anticipated stability at 3 percent. The latest rate is the lowest observed in over three years, heightening expectations that the Federal Reserve might implement interest rate cuts in the near future. On a monthly basis, consumer prices rose by 0.2 percent, aligning with forecasts, after a minor decline of -0.1 percent in June. Core inflation, excluding volatile food and energy prices, also saw a slight decrease to 3.2 percent from 3.3 percent, matching expectations and further supporting the case for potential monetary easing.

In contrast, the UK experienced its first increase in inflation for the year, as reported by the Office for National Statistics. Inflation rose to 2.2 percent in July, slightly below the anticipated 2.3 percent but still above the Bank of England’s target of 2 percent. This increase follows two months where inflation was stable at the target rate of 2 percent. Despite this rise, it remains below the expectations set by economists, who had forecasted a higher figure. The Bank of England had previously cut its main interest rate for the first time in over four years earlier this month, reducing it from a 16-year high of 5.25 percent to 5 percent. Although UK inflation had met the Bank's 2 percent target in May and June, it is projected to rise towards 3 percent later in the year before easing in 2025. 

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