--UK Jun RPIX up 0.2% on mo; up 2.4% on yr
--UK Jun RPI up 0.1% on mo; up 1.9% on yr
--UK Jun RPIY up 0.3% on mo; up 2.8% on yr
--UK Jun RPIX above market expectations
--UK Jun HICP up 1.7% on year
--UK Jun service sector inflation up 4.0% on yr; goods up 0.7%
--UK Jun tax & price index up 0.6% on year
--UK Jun RPI: Main up effects food, clothing, leisure goods
--UK Jun RPI: Main down effects housing, petrol, leisure services
--ONS: UK Jun food prices pushed up by pork, poultry, soft drinks
--UK Mar-May engineering turnover -6.0% on qtr, +0.5% on year
--ONS: UK yrly food prices highest since Sep 1995

London, July 17 (BridgeNews) - The RPIX measure of U.K. underlying inflation stuck defiantly at an annual rate of 2.4% in June, disappointing expectations it would drift back to 2.3% after last month's spike. The Office for National Statistics said it rose 0.2% on the month, with the downward pressure from cheaper petrol being largely cancelled out by more expensive non-seasonal food, clothing and footwear, and leisure goods.
Headline RPI inflation rose 0.1% on the month and 1.9% on the year in June, compared with a rise of 0.6% on the month and 2.1% on the year in May. By far the biggest downward effect came from lower mortgage costs, which are stripped out of the RPIX measure.
RPIY inflation, which excludes mortgage interest payments and indirect taxes rose 0.3% on the month and 2.8% on the year, compared with a rise of 0.9% on the month and 2.8% on the year in May. The EU harmonized measure of inflation rose an annual 1.7%, unchanged from last month.
The figures suggest discounting on the high street is not as deep this year as it had been last year, particularly for non-seasonal food and clothing. This tallies with signs that retailers are enjoying stronger demand than last year and are finding it easier to push through price increases.
Non-seasonal food prices, particularly soft drinks, poultry and pork, added 0.04 percentage points to the annual rate of inflation, making the single biggest upward contribution.
Seasonal food prices also increased but had a negligible effect on the overall annual rate change. Extreme weather conditions over the last year have made it very difficult to predict crop sizes and their resulting impact on prices but the ONS continued to warn about potato shortages in the months ahead.
Clothing and footwear prices were unchanged on the month and fell 4.7% on the year but the price cuts were not as big as last year and had the effect of adding 0.03 percentage points to the overall annual rate change. There was a similar impact from higher prices for leisure goods, in particular audio and video equipment.
Elsewhere there were smaller upward effects from household goods, personal goods and services, catering, and alcoholic drinks.
The big effect on the downside came from housing costs, mainly this year's cut in mortgage costs feeding through to the index, which reduced the annual rate by 0.23 percentage points.
Cheaper petrol cut 0.18 percentage points off the annual rate but the effect was dulled by higher prices for second hand cars, which meant motoring costs as a whole only reduced the index by 0.08 percentage points. There was also a downward effect on the overall annual rate from cheaper foreign holidays.
The following are economists' snap reactions to the figures.
Brian Hilliard, economist at Societe Generale
"I'm a little bit disappointed. I expected some improvement on the food side. But I think we'll see better data in the next month or two and I still think 2.4% overstates underlying inflation."
Mark Miller, Economist at Morgan Stanley
"It was in line with our expectations. Seasonal food prices looked likely to stay firm in the month of June but I do think that food price pressures will ease back over the coming months. I don't think these data necessarily mean the end of the easing cycle, particularly with the global economic slowdown still in train."