CPI inflation up to 4.4%
CPI inflation jumps upward
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Tuesday, 12, Aug 2008 06:56
The consumer price index (CPI) – the government measure of inflation - has increased to 4.4 per cent in July, according to the Office for National Statistics (ONS).
This is well ahead of the government's target of two per cent, and an increase on the 3.8 per cent recorded during June this year.
The figure also represents the largest jump ever recorded since records began, well ahead of industry expectations.
Strong upward pressure came from food and non-alcoholic beverages – especially meat, bread and cereals, and vegetables - where prices rose this year.
Transport has also played a role, largely due to the price of fuels and air transport. Petrol also increased in price by 1.2 pence per litre between June and July this year, to stand at 118.8 pence, compared with a fall of 0.4 pence last year.
Housing and household services also exerted an upward pressure, according to the ONS; principally due to gas and electricity bills which were unchanged this year but fell a year ago.
However, a small downward pressure came from recreation and culture, where the price of computer games fell this year but rose a year ago.
The price of pre-recorded DVDs also fell by more than a year ago.
The Retail Prices Index (RPI) measure of inflation rose to five per cent in July, up from 4.6 per cent in June.
The main factors affecting the CPI also affected the RPI.
Additionally, there was a large downward contribution from housing with the main effect coming from house depreciation (which is excluded from the CPI).
The announcement puts further pressure on the Bank of England to raise interest rates and subdue spending. However, the monetary policy committee (MPC) recently elected to maintain rates for a fourth consecutive month at five per cent.