Rising clothing and fuel prices sparks inflation rebound, figures show

1 London

London News & Search

1 News - 1 eMovies - 1 eMusic - 1 eBooks - 1 Search

Rising clothing and fuel prices caused inflation to rebound last month, intensifying the squeeze on cash-strapped households grappling with low wage growth.

Figures from the Office for National Statistics (ONS) showed the Consumer Price Index (CPI) measure of inflation was 2.9% in August, outstripping economists’ expectations of 2.8%.

It brings an end to a momentary pause in June and July at 2.6%, and matches levels seen in May this year and June 2013.

CPI was last higher in April 2012 when the rate reached 3%.

Clothing and footwear prices, climbed to its highest level since official records began at 4.6% year-on-year in August.

The move was partly driven by rising import costs for retailers linked to sterling’s slump following the Brexit vote.

Motor fuels were also pushing the overall cost of living higher, with fuels and lubricants rising 1.6% month-on-month in August following a 1.3% fall last year.

The price of petrol rose by 1.8p a litre to 115.7p in August, while diesel picked up by 2p to 117.6p.

However, downward pressure came from airfares, which saw smaller hikes between July and August at 10.9%, compared to a 14.4% monthly jump in 2016.

The Bank of England is predicting CPI to peak at around 3% in October, higher than its target of 2%.

Governor Mark Carney warned last month that the pressure on families would continue for the next few quarters.

Households have seen their spending power diminish as wage growth tracks below inflation.

The Retail Prices Index, a separate measure of inflation, was 3.9% last month, rising from 3.6% in July.

1 London

London News & Search

1 News - 1 eMovies - 1 eMusic - 1 eBooks - 1 Search



Leave a Reply