12 July 2023
– The headline Consumer Price Index (CPI) rose by 0.2% month-on-month (MoM), lower than the expected 0.3% MoM increase, resulting in a year-on-year (YoY) rate of 3.0%, the lowest since March 2021.
– The decline in the YoY headline CPI marks the 12th consecutive month of declines, which is the longest streak of declines in history since 1921.
– Core CPI, which excludes shelter, fell to a YoY rate of 4.8%, the lowest since October 2021.
– Services inflation remains persistent, even as goods inflation fades.
– The significant drivers of the YoY drop in headline and core CPI are yet to be specified.
– Real wage growth saw a year-on-year increase of 0.6% in June, the first rise in 27 months.
– There are indications from M2 (a measure of money supply) that deflationary pressures may be building up.
Overall, the CPI figures show a cooling trend in inflation, with lower than expected increases in both the headline and core CPI. Services inflation remains steady, while goods inflation is slowing down. Real wage growth has seen an increase, and there are signs of potential deflationary pressures on the horizon.