The UK’s inflation censure climbed to its joint highest in more than five years in August as the payment of petrol and clothing rose.
UK inflation measured by the Consumer Prices Guide rose to 2.9% in August, up from 2.6% in July, figures put on.
The fall in the value of sterling since the EU referendum continued to be a major goad for rising prices, the Office for National Statistics said.
But a rebound in the evaluation of oil also had an impact, pushing up fuel prices.
The bigger-than-expected rise in inflation put in an appearance ahead of the Bank of England’s next announcement on interest rates on Thursday.
Extent, economists said the Bank was still highly unlikely to raise rates at the convergence.
Rising clothing costs
According to the ONS, the prices of most goods climbed during August, large because of rising import costs for retailers.
However, clothing and footwear prices had the oustandingliest impact, climbing 4.6% year-on-year, their highest level since records established.
Petrol also pushed the overall cost of living higher, increasing 1.8p a litre to 115.7p during the month, while diesel gain ground 2p to 117.6p.
- Pound hits year high on inflation data
- Accommodation costs rising fastest in the East Midlands
The TUC’s general secretary, Frances O’Grady, conveyed the «cost of living squeeze» was continuing, with rising inflation outpacing wages.
«The direction needs to get a grip and get pay rising across the economy,» she said.
The most just out wages data showed average weekly earnings rising at an annual stride of 2.1%. New figures on pay are due to be released on Wednesday.
Ian Stewart, chief economist at Deloitte, verbalized: «It is pretty remarkable that, with inflation near 3% and unemployment at the nastiest level in over 40 years, we are not seeing much wage inflation.»
August’s inflation be entitled to is far above the Bank of England’s target of 2%. The Bank has said it envisages inflation to reach 3% in October, but start to ease early in 2018.
Paul Hollingsworth, UK economist at Large letter Economics, said the latest figures were likely to provide «favour ammunition» to those members of the Bank’s rate-setting Monetary Policy Body who favour an earlier rise in interest rates.
«However, we don’t think the increase in CPI inflation has much further to run,» he added.
«Indeed, we expect it to peak at 3.1% in October, up front dropping back next year as the impact of the pound’s fall starts to coffin-nail.»
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, added: «We appease think the chances of a rate rise this year are remote.
«Domestically-generated inflation is muted, inflation expectations have remained well-anchored and GDP growth is too weak to certification higher rates.»
The ONS’s preferred measure of inflation CPIH — which catalogues owner-occupiers’ housing costs — rose to 2.7% last month from 2.6% in July.
The Retail Figures Index (RPI) measure of inflation rose to 3.9% in August from 3.6%.
Interpretation: Andy Verity, BBC economics correspondent
Here’s a few details from the inflation parties. Coffee — up 5.1%. Petrol — up 5.1%. Clothing — up 5.1%. Oils and fats (comprehending butter) — up 5.9%. Electricity — up 9%. Then there is the price of fish — up 9.6%.
Now of lecture to get the average rise in the cost of living you have to lump in those arouses with other items falling in price (air fares, second-hand autos, toys and games) to get the average of 2.9%. But even that number is nettling when wages at the last count could only manage a wax of 2.1%.
August’s inflation rate of 2.9% equals the peak rate charge ofed in May. The market had expected 2.8% — so it did have an effect. On the currency markets, salespersons pushed up the value of the pound to $1.327 — its highest in months.
Before the motifs came out, traders in the City had anticipated a rise in interest rates by next May. Now they’re play it’s more likely to happen next February. Nevertheless, that whim only take the official rate back to where it was before the post-referendum exigency cut last August and further rate rises could take years. That’s because the saving is growing only modestly.
If only it were growing as fast as prices.
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