In July UK inflation rose to 2.5% after holding steady at 2.4% in the previous three months. The cost of transport and computer games has increased.
It was the first jump in the consumer prices index (CPI) since November and was in line with forecasts from the Bank of England.
The Retail Prices Index (RPI) measure of inflation fell to 3.2%. The Department for Transport uses the RPI figure to set the maximum annual increase for regulated rail fares.
Wage growth is still outstripping inflation, on Tuesday the Office for National Statistics said that average earnings, excluding bonuses rose by 2.7% for three months to June.
Wednesday’s inflation figures have shown that increases in the prices of computer games and transport are up by 5.6% in the year ending July. For manufacturers the cost of raw materials was 10.9% higher than in July 2017 and the cost of oil has increased by 50%.
This is not the highest CPI has been in recent times, in November the CPI figure had hit a 5 year high at 3.1% when the inflationary effect of the pound’s fall following the June 2016 Brexit vote reached its peak.
The Bank of England expects inflation will start to settle down to just above its 2% target in 2 years’ time as it gradually increases interest rates.
For more information in relation to the figures quoted please visit; https://www.ons.gov.uk/