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UK inflation stalls as interim trade deal floated

Tuesday, August 15, 2017 - 01:45

British consumer price inflation unexpected held steady last as fuel prices fell and other signs that the squeeze on households' spending power may slowly be starting to level off. As Laura Frykberg reports, the news came as Britain said it wants an interim customs agreement with the EU after Brexit.

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Commuting in Britain can be a headache already... But it could be about to turn into a migraine. Rail fares are set to increase by 3.6 percent next year - the biggest annual increase in five years. SOUNDBITE (English) UK COMMUTER SAYING: "Services are alright, but year it is still a lot of money." SOUNDBITE (English) UK COMMUTER SAYING: "That is a joke basically, so many of us are not getting pay rises that can manage that." The rise is in line with the latest inflation data. While it held at 2.6 percent last month... July saw the retail prices index reach 3.6 percent. With people's pay not keeping up. SOUNDBITE (English) JAMES HUGHES, CHIEF MARKET ANALYST, GKFX, SAYING: "Average earnings are still at one point seven to one point four percent. So the fact is we still have inflation going much quicker than wages, that is a problem for the economy. " Also a problem for the economy - uncertainty for UK businesses. For months they've wanted to know whether Britain will remain in the customs union after Brexit... A key factor for doing trade. On Tuesday, Brexit Minister David Davis gave them an answer. SOUNDBITE (English) UK BREXIT MINISTER DAVID DAVIS, SAYING: "The interim period, will be a bit like the customs union now, but it will be not the current customs union, we won't be a member of the single European Union, and we will want to go out and strike our trade deals, not bring them into effect, because that would give scope for sort of tunneling into Europe from the outside." Brussel's said it will study the proposal carefully.. But will only address the post-Brexit relationship, once progress has been made on the divorce. That includes a fee Europe wants the UK to pay on its exit. That subject could still de-rail the discussions - not to mention the possible cost of delaying an exit from the customs union

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UK inflation stalls as interim trade deal floated

Tuesday, August 15, 2017 - 01:45