Serbia Seen Resuming Rate Cuts After Long Pause: Decision Guide
The National Bank of Serbia is likely to reduce its one-week repurchase rate by 25 basis points to 5.5%, according to 11 of 18 economists in a Bloomberg survey. The rest expect policymakers to keep the benchmark on hold, even after the European Central Bank, which Serbia monitors closely for direction, continued to reduce rates last week.
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Sharp rise in airfare and food costs pushed UK inflation higher in July, denting rate cut hopes
LONDON (AP) — Higher food and airfare prices pushed U.K. inflation above expectations in July, official figures showed Wednesday, which has tempered market expectations that the Bank of England will cut interest rates again this year. The Office for National Statistics said consumer price inflation was 3.8% in the year to July, up from 3.6% in June. One of the contributors was airfares soaring by 30.2% between June and July, the biggest jump since the collection of monthly data began in 2001. Most economists had anticipated a more modest rise in inflation to 3.7%. With inflation now at its highest rate since January 2024 and nearly double the Bank of England's target of 2%, the prospects of another rate cut in 2025 are diminishing. 'July's outturn probably extinguishes hope of a September interest rate cut, while strengthening underlying inflationary pressures calls into question whether policymakers will be able to relax policy again this year," said Suren Thiru, economics director at the chartered accountants institute ICAEW. The bank cut its main interest rate by a quarter of a percentage point to 4% earlier this month, its fifth reduction in a year, when policy makers began lowering borrowing costs from a 16-year high of 5.25%. The Bank of England's key rate, a benchmark for mortgages as well as consumer and business loans, is now at the lowest level since March 2023. The latest increase is another blow to the Labour government, which was partly propelled into power last July because of the cost-of-living crisis, which saw inflation rise to over 11% at one time. Treasury chief Rachel Reeves acknowledged there was 'more to do to ease" the cost-of-living. The Associated Press Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
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House price inflation accelerated in June as stamp duty disruption eases
House price inflation accelerated last month as growth in rental prices eased back, according to official figures. The average UK house price increased by 3.7% to £269,000 in the 12 months to June. The Office for National Statistics (ONS) revealed an uptick in price growth after a 2.7% rise was reported in the 12 months to May. It comes amid a backdrop of cooling interest rates, which dropped again to 4% earlier this month. The acceleration comes after price inflation was impacted by changes in stamp duty, with the threshold at which movers pay the tax decreasing from £250,000 to £125,000 at the end of March. Elliott Jordan-Doak, senior UK economist at Pantheon Macroeconomics, said: 'House prices are recovering quickly from the disruption caused by the hike to stamp duty in April. 'Month-to-month house price inflation can be volatile at the best of times, so the sharp gains in house prices in May and June could be partly undone by a fall in July's data. 'But cutting through the noise, we think fundamental housing demand remains solid, indicating that house prices can continue to rise steadily over the course of the second half of 2025.' Average house prices increased to £291,000 (3.3%) in England, £210,000 (2.6%) in Wales, and £192,000 (5.9%) in Scotland, in the 12 months to June. Meanwhile, average UK monthly private rents increased by 5.9%, to £1,343, in the 12 months to July, the statistics body said. Average rents increased to £1,398 (6.0%) in England, £807 (7.9%) in Wales, and £999 (3.6%) in Scotland, in the 12 months to July. ONS head of housing market indices Aimee North said: 'House price annual inflation continues to pick up with the average UK house price now at around £269,000. 'Annual private rents inflation has slowed across the whole of the UK for the seventh consecutive month.' Jean Jameson, chief sales officer at Foxtons, said: 'July brought a steady pace of activity, even as the summer holidays took some buyers and sellers out of the market. 'That said, well-priced homes, especially one and two-bed flats where supply is strongest, continued to attract interest. 'We've also seen an encouraging shift in sentiment following the recent base rate cut, which should support a pick-up in activity as we move towards the autumn.'
Yahoo
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Where inflation jumped in July – and where it eased
Where inflation jumped in July – and where it eased A steep jump in the cost of air travel, along with increases in the price of many everyday items from tea and coffee to potatoes and eggs, helped push the UK's overall rate of inflation in July to an 18-month high. The average cost of air tickets was 15.5% higher last month than it was a year earlier, compared with an annual rise of just 0.5% in June, according to data published by the Office for National Statistics (ONS). When comparing figures month on month, air fares jumped 30.2% between June and July: more than double the rise of 13.3% between the same months in 2024, and the largest July increase since monthly inflation data for air travel began in 2021. Prices accelerated for a range of household groceries last month, which further pushed up the cost of living. The average cost of coffee was up 18.0% year on year in July compared with 12.3% in June; tea was up 4.9% compared with 0.5%; fruit juices were up 8.6% compared with 3.6%; and whole milk was up 11.3% compared with 8.4%. Inflation also picked up pace for margarine, eggs, potatoes, crisps, breakfast cereals, chocolate and bread. Energy bills edged higher, with electricity costs up 8.0% year on year in July, greater than the 4.5% jump in June, while gas was up 13.0% compared with 12.3% the previous month. Both petrol and diesel recorded a negative annual rate of inflation in July, but by a smaller margin than in June, indicating a rise in the cost of filling up at the pumps. The average price of petrol in July was down 7.3% year on year, compared with a fall of 9.5% the previous month, while diesel was down 6.0% compared with a previous drop of 8.6%. Not everything saw a jump in price last month, however. Items where prices fell faster year on year in July than in June included pasta and couscous, fish, olive oil and sugar. Inflation eased for cheese, which stood at 3.4% in July compared with 5.2% in June, while children's shoes swung from positive annual inflation (1.9%) to negative (down 1.9%). Below are some examples of how the Consumer Prices Index (CPI) inflation rate has eased or accelerated. Two figures are listed for each item: the average rise in price in the 12 months to June, followed by the average rise in price in the 12 months to July. – Examples where annual inflation has accelerated, ranked by the size of change: Passenger air travel: June up 0.5%, July up 15.5%Coffee: June up 12.3%, July up 18.0%Cinemas/theatres/concerts: June up 0.4%, July up 5.7%Fruit & vegetable juices: June up 3.6%, July up 8.6%Tea: June up 0.5%, July up 4.9%Electricity: June up 4.5%, July up 8.0%Hotels/motels: June down 2.7%, July up 0.3%Whole milk: June up 8.4%, July up 11.3%Breakfast cereals: June up 2.2%, July up 5.1%Eggs: June up 3.4%, July up 4.9%Ready-made meals: June up 4.5%, July up 5.7%Potatoes: June up 0.7%, July up 1.9%Crisps: June up 4.2%, July up 5.1%Chocolate: June up 16.3%, July up 17.2%Women's clothes: June up 2.3%, July up 2.9%Soft drinks: June up 5.6%, July up 6.1% – Examples where annual inflation has eased: Children's footwear: June up 1.9%, July down 1.9%Passenger train travel: June up 8.4%, July up 6.1%Fridges/freezers: June up 1.7%, July down 0.5%Dried fruit/nuts: June up 7.4%, July up 5.4%Cheese/curd: June up 5.2%, July up 3.4%Yoghurt: June up 3.0%, July up 1.2%Children's clothes: June down 2.1%, July down 3.8%Pasta/couscous: June down 0.7%, July down 2.1%Fish: June down 0.4%, July down 1.8%Washing machines/dryers: June down 2.0%, July down 3.4%
