UK inflation, as measured by the Consumer Prices Index (CPI), edged higher in July rising from its previous level of 0.5% to 0.6%, according to the latest data from the Office for National Statistics (ONS).
Whilst remaining at historically low levels, this rise of just 0.1% was sufficient to record the highest inflation figure seen since November 2014.
The major factors behind these statistics were the increase in the price of motor fuels, alcoholic beverages and accommodation services. Food prices, although lower, did not fall by as much as in previous months.
Counterbalancing these increases were falls in the cost of social housing rents, together with some falling prices for certain toys and games.
The wider measure of inflation the Retail Prices Index (RPI), which includes housing costs, whilst no longer deemed to be a National statistic, also rose to 1.9% from its previous recorded level of 1.6% in June. RPI is important, however, as many service costs, such as regulated train fares in England, Scotland, and Wales, are matched against this benchmark and could rise accordingly by a similar amount.
In future, the de facto devaluation of Sterling will impact further on prices as the cost of imported goods will increase accordingly.
The Head of Prices at the ONS, Mike Prestwood, commenting on this was reported to have said: “There is no obvious impact on today’s consumer prices figures following the EU referendum result, though the Producer Prices Index (PPI) suggests the fall in the exchange rate is beginning to push up import prices faced by manufacturers.”
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