Still-rising pork prices add to near-term inflation risks

Pork prices continued to rise in the first half of July. But the pace at which they are rising has slowed. Pig numbers are picking up – helped in part by high prices – and the government is releasing pork reserves. The timing is uncertain but the retail pork price is likely to drop sharply in coming months. As it does, headline inflation will drop back too: inflation in the prices of all consumer goods other than pork has been stable since late in 2010.