While the media is obsessing over who will win the Tory leadership contest, I'll bring you up to date on the latest inflation and house price news.

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The Office for National Statistics issued two releases yesterday that seem to have been overlooked, one on inflation and the other on house prices.

First inflation, where it looks like the Remain campaign will have to wait another month for the post Brexit vote promised inflation spike.

The Consumer Prices Index (CPI) 12 month inflation rate was 2.0% in May, which is down 0.1% on the 2.1% seen in April.

When factoring in homeowner/occupier costs, the CPIH 12 month inflation rate was 1.9%, down from 2.0% in April.

The ONS put this reduction down to falling fares for transport services, particularly air fares influenced by the timing of Easter in April and also said that falling car prices produced the largest downward contributions to the change in the rate between April and May 2019.

But this was partially offset by rising prices for a range of games, toys and hobbies, furniture and furnishings, and accommodation services, said the ONS.

This places inflation within the bounds of the target set for the Bank of England when deciding on whether or not to change interest rates. So one assumes the Bank's Monetary Policy Committee will not be in a rush to change anything yet.

On house prices, although they went up in the year to April 2019, they have not kept pace with inflation.

The ONS says that average house prices rose by 1.4% over that 12 month period, which was a slight drop from the 1.6% seen in the year to March 2019.

And the ONS says that there has been a general slowdown in UK house price growth, driven mainly by a slowdown in the south and east of England.

And in London prices fell by 1.2% in the year to April 2019, compared to the fall of 2.5% seen in the year to March 2019.

As you can see from the graph the overall trend is still up and prices are now far higher than they were before the financial crisis that led to the slump seen in 2008. So it is not unreasonable to expect a slowdown at some stage.

The inset graph shows what has happened to the average price of a house in the last year and where it hit the high of £232,000.

In Wales, house price growth increased by 6.7% in the year to April 2019, up from 3.9% in March 2019, with the average house price now sitting at £164,000.

Northern Ireland saw an increase of 3.5% over the year to 2019 quarter one with an average price of £135,000.

House prices in Scotland rose by 1.6% in the year to April and the average house price is £151,000.

England saw a 1.1% increase overall with the price of an average house now at £245,000.

The East Midlands had the strongest growth in England with a 2.9% increase, but London saw a decline of 1.2% and prices in the South East fell by 0.8%.

So although house price growth is sluggish at the moment, it's not all doom and gloom is it?

Sources:

https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/consumerpriceinflation/may2019

https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/housepriceindex/april2019

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