Fuel prices push up UK inflation rate to 0.6%
August 16, 2016, 12:56 pm    |   Source: BBC

Rising fuel prices helped to push the UK`s inflation rate higher last month, according to official figures.

The annual inflation rate as measured by the Consumer Prices Index (CPI) rose to 0.6% in July from 0.5% in June, the Office for National Statistics said.

More expensive alcoholic drinks and hotel rooms also helped to increase the CPI rate, the ONS said.

The Retail Prices Index (RPI) measure of inflation rose to 1.9% in July from 1.6% in June.

July`s RPI inflation rate sets the cap for how much regulated rail fares in England, Scotland and Wales can rise by next year.

Pricier imports

Separate figures from the ONS suggested that the fall in the value of the pound since the UK`s referendum vote to leave the EU had increased the cost of imports for manufacturers.

Input prices faced by manufacturers rose 4.3% in the year to July, compared with a fall of 0.5% in the year to June.

The most dramatic rises came in the cost of imported food materials, which rose 10.2%, and the price of imported metals, which rose 12.4%.

In addition, the price of goods leaving the factory gate were 0.3% higher than a year earlier, the first annual increase since June 2014.

"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 price faced by manufacturers," said Mike Prestwood, head of prices at the ONS.

However, Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said the fall in sterling was "entirely responsible" for the rise in CPI inflation to the highest rate since November 2014.



Against the dollar, the pound is some 13% below its level in the run-up to the referendum and 10% lower against the euro.

"Sterling`s depreciation ensured that pump prices rose by 0.7% month-to-month even though dollar oil prices declined," he said.

"Labour market weakness might constrain wage growth soon, but with productivity also likely to fall sharply as the economy slows, firms` cost pressures will remain intense.

"As a result, we continue to think that CPI inflation will hit 3% in the second half of 2017."



Comments

m1.png m2.png m3.png m4.png m5.png
f1.png f2.png f3.png f4.png f5.png
+ =
Exchange Rates
EUR/USD 1.0594
EUR/BRL 3.413
EUR/AUD 1.4172
EUR/TRY 4.0056
Weather

London

Jan17      03:48
  1. Humidity 47%
  2. Downwind
  3. Winds 0 kph
Now
-14℃
Latest Videos
VIDEO: The Biology of Bliss and the Human OS - Jamie Wheal
Terror and Tourism: Changing the Travel Landscape
Earth In 2050 - HD Documentary 2015
The drive for gender equality in corporate Japan
Plane touches down then aborts during storm (VIDEO)
The Fermi Paradox II — Solutions and Ideas – Where Are All The Aliens (VIDEO)
Money Survival Tips for Millennials (VIDEO)
Lightning strike explodes a tree (VIDEO)
The Moons of Mars Explained (VIDEO)
3 Reasons Why Nuclear Energy Is Awesome! (VIDEO)
3 Reasons Why Nuclear Energy Is Terrible! (VIDEO)
Nuclear Energy Explained: How does it work (VIDEO)
Latest Photos
best cities for small businesses
Best Jobs in America (PHOTOS)
Inside the coolest private jets (PHOTOS)
The best hotel club floors in the world
Winning Images from the 2015 National Geographic Traveler Photo Contest
PHOTOS: Raging Wildfires Prompt Major Evacuation
Amazing Geometry Cities from air - Photos
Photos Bangkok Get snow - Opens Snow Village
Stunning Summer Aerials from Around the World (PHOTOS)