The outsized 0.4% m/m increase in core CPI in August was principally due to a 5.4% m/m surge in used motor vehicle prices which, unusually for this very early stage of the recovery, reflects problems with dwindling inventory. With goods production continuing to lag behind the rebound in spending, those problems are only going to become more acute over the next few months, pushing core inflation higher.

Read the publication Consumer Prices (Aug.) on the Capital Economics Website.

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