UK inflation rate increases to 2.9%

News


12 Sep, 2017

UK inflation rate increases to 2.9%

The UK's inflation rate grew to its joint highest level in more than five years last month as the price of petrol and clothing continues to rise.

UK inflation measured by the Consumer Prices Index climbed to 2.9% in August, up from 2.6% in July, new data has shown.

The Office for National Statistics said the main impetus for rising prices is the decline in the value of the pound since the EU referendum in June 2016.

However, a rebound in oil prices also had an impact, pushing up the cost of fuel.

The bigger-than-expected rise in inflation has been announced just ahead of the Bank of England's next meeting on interest rates this Thursday.

Although, forecasters said the Bank was still extremely unlikely to raise rates at the meeting.

Clothing and footwear prices had the biggest impact on the headline inflation rate last month, according to the ONS.

They grew 4.6% year-on-year, their highest level since records began, partly due to increasing import costs for retailers.

Petrol also pushed the overall cost of living higher, increasing 1.8p a litre to 115.7p during August, while diesel gained 2p to 117.6p a litre.

The TUC's general secretary, Frances O'Grady, said the "cost of living squeeze" was continuing, with rising inflation outstripping wages.

She said, "The government needs to get a grip and get pay rising across the economyā€¯.

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