Inflation in the U.K. rose to 0.6% in July, beating analyst expectations, as the weaker pound following the Brexit vote made imported goods more expensive for British buyers. At 0.6%, consumer prices rose the most since November 2014, according to the Office for National Statistics. Tuesday’s data were seen as crucial as they mark the first formal hard-data release to cover the entire month of July and take into account the full effect of Brexit on the U.K. economy. Analysts had expected inflation to remain at 0.5% year-over-year in July, arguing that weaker oil prices and a continued fall in clothing prices would offset the pound slump. However, the ONS noted that as crude oil is priced in dollars, the pound weakness made energy imports more expensive during the month. “The sharp depreciation of sterling seen since the beginning of 2016 may start to influence upward pressure on the CPI through the continued import of goods that are in the basket of measured goods and services,” the ONS said. Sterling rose to $1.2975 after the inflation release, up from $1.2880 late Monday in New York.
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