Commenting on the UK’s July inflation figures released today, KPMG Chief Economist, Andrew Smith, said:
“It might be little comfort for rail commuters, but July’s unexpected jump in headline inflation is likely to prove just a hiccup. The core rate has also risen, but this largely reflects the reversal of the factors that led to the surprisingly sharp drop in June and other temporary factors. The underlying downward trend remains intact and inflation should still dip below target around the turn of the year.
“Thus although the uptick is unwelcome, it is not likely to unduly concern the Monetary Policy Committee or dissuade it from further action. While the economy remains moribund, expect another round of Quantitative Easing when the current tranche is completed in November.”
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KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and operates from 22 offices across the UK with over 11,000 partners and staff. The UK firm recorded a turnover of £1.7 billion in the year ended September 2011. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. We operate in 152 countries and have 145,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. KPMG International provides no client services.
