UK inflation on the up at +1.9% in June

UK inflation data showed a bigger jump than expected by the City at +1.9% in June.  The consensus forecasts were around 1.6%.  This represented the biggest monthly jump since October 2012 and was pushed up by clothing, footwear, food and soft drinks, perhaps reflecting a seasonal effect from the warm weather. The big hike in inflation saw the 10-year Gilt yield rise from 2.60% to 2.65%.  This is still a low rate, however, and doesn’t really indicate a major shift in expectations as to when real interest rates will rise.  But it is an interesting development and is something to watch closely in the midst of US earnings season and central bankers lining up key speeches ahead of the holidays.