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Economy in Brief
U.S. New Home Sales and Prices Strengthen
Sales of new single-family homes during March increased 4.0% (8.8% y/y) to 694,000 (SAAR)...
U.S. FHFA House Price Index Continues to Strengthen
The FHFA index of U.S. house prices rose 0.6% during February...
U.S. Energy Prices Rise Further
Retail gasoline prices increased to $2.80 per gallon last week (14.3% y/y)...
Italian Confidence Backtracks But Remains High-Valued As It Is for France and Germany
From Q1 2008 to date, Italian GDP actually has failed to grow and has declined by 5.8%...
U.S. Existing Home Sales & Prices Rise Again
The NAR reported that sales of existing homes increased 1.1% during March (-1.2% y/y) to 5.600 million units (AR)...
by Robert Brusca August 14, 2007
Inflation is slowing on a broad front in the UK in July - a quite unexpected development. Year/year, the Harmonized Index of Consumer Prices (HICP) is now below the 2% ceiling rate and suddenly that BOE inflation letter explaining why inflation had drifted above 3% seems oh so distant. The Retail Price Index (RPI) is still high but the Retail Price Index ex Mortgage Interest Payments (RPIX) tells the tale of sharply lower inflation too. Food costs are sharply lower. So are clothing and footwear, where price fell over three months.
This could be somewhat of a catalytic month for the BOE as well as for the ECB. Not only are we in the midst of financial turmoil at a time that the ECB had pointed strongly to a rate hike, but GDP growth has slowed. Now inflation, the reason for hiking rates is sharply lower, at least in the UK but also in France. Are things changing all that much or is this coincidence? Do you believe in Coincidence?
| M/M % Change | % SAAR | ||||||
| Jul-07 | Jun-07 | May-07 | 3-MO | 6-MO | 12-MO | Yr Ago | |
| HICP | -0.3% | 0.3% | 0.1% | 0.4% | 1.5% | 1.9% | 2.4% |
| RPI: All Items | -0.3% | 0.6% | 0.3% | 2.4% | 3.5% | 3.8% | 3.3% |
| RPIX (ex mortgage interest) | -0.3% | 0.5% | 0.2% | 1.4% | 2.3% | 2.7% | 3.1% |
| RPI ex seasonal food | -0.2% | 0.6% | 0.3% | 2.5% | 3.5% | 3.9% | 3.2% |
| Food & Beverages | -0.9% | 0.9% | 0.2% | 0.7% | 3.7% | 3.2% | 2.7% |
| Housing & HH Expenditures | -0.5% | 1.0% | 0.3% | 3.1% | 4.3% | 6.8% | 5.1% |
| Clothing & Footwear | 0.1% | 0.1% | -0.4% | -0.8% | 2.8% | 0.1% | -1.3% |
| Leisure Services | -0.1% | 0.3% | 0.2% | 1.9% | 1.3% | 2.8% | 2.1% |
| Leisure Goods | -0.1% | -1.4% | 0.1% | -5.6% | -4.8% | -3.0% | -2.5% |
| Motoring Expenditures | -0.4% | 0.7% | 1.0% | 5.2% | 3.9% | -0.3% | 3.1% |
| Fares and Travel Costs | 0.0% | 0.9% | 3.1% | 17.3% | 10.9% | 8.6% | 0.0% |
