Inflation 1.7% for Second Consecutive Quarter

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Q2 '14 Inflation: 1.7%

Average Prediction: 2.4%

Number of Correct Forecasts: 2/419

Current S&P 500 High: 1985 (3rd July)

Competition Progress: 59.3% complete

The average level of inflation over the second quarter of 2014 was 1.7%, the same as the average rate in Q1.  However, instead of falling in the same direction over the course of the three months, this time there was an increase at the end; the three monthly rates were 1.8% in April, 1.5% in May and 1.9% in June.  The increased rates in April and June marked the first time inflation had risen since the middle of 2013, and adds further credibility to the belief that interest rates will soon be raised above the rock bottom 0.5% "emergency rate" set by the Bank of England.

The low rate of inflation in the first two quarters of this year has caught almost all of our competition entrants by surprise: only two people (out of 419) correctly forecast a Q2 rate of 1.7%, with a further 10 people thinking it would currently be lower and the rest predicting a higher average rate (up to an unlikely maximum of 10%).  95% of entrants thought the inflation rate would be greater than 2% in both Q1 and Q2.

Comparing the performance of our three Titans, Ros Altmann (LSE) continues to be closest on inflation (although even Ros predicted a rate of 2.1% this quarter), and this has helped her to retake 2nd position in the competition, which remains incredibly tight.  Only 2 points separate Ros from Kevin Daly in 1st and Stephen King in 3rd place.

Another key variable will be announced later this month, when the preliminary estimate of second quarter GDP growth is released on the 25th July.  The average forecast was 0.8%, with our official competitors' predictions ranging from 0.6% to 1.3%. 

Click here for a summary of the results so far, or here for the full standings.