London, Aug 20 (IANS): The UK's inflation rate increased to 1.0 per cent in July as lockdown measures, imposed due to the Covid-19 pandemic, eased, the Office for National Statistics (ONS) said.

The reading in July was higher from 0.6 per cent in June, with both far below the Bank of England (BoE)'s 2 per cent target for inflation, as social distancing still affected people's activities, Xinhua news agency quoted the ONS as saying on Wednesday.

The central bank predicted earlier this month that Consumer Prices Index (CPI) inflation is expected to be around 2 per cent in two years' time when conditioned on prevailing market yields.

Meanwhile, the CPI including owner occupiers' housing costs (CPIH) 12-month inflation rate jumped to 1.1 per cent in July, up from 0.8 percent in June, said the ONS.

The largest upward contribution to the change in the CPIH 12-month inflation rate during the period came from clothing and footwear, it said.

According the BoE's statement in early August, it "does not intend to tighten monetary policy until there is clear evidence that significant progress is being made in eliminating spare capacity and achieving the 2 per cent inflation target sustainably".