Cost of goods continue to rise as inflation stays at 2.6% in July
Living standards are still being squeezed as the inflation rate for goods including food, clothing & household goods continues to rise.
The inflation figures for July are out and it shows the inflation rate for the Consumer Prices Index (CPI) was 2.6%, which is unchanged from June but still above the Bank of England target of 2%. For many Britons, this means their living standards are still being squeezed with stagnating wage growth not able to counter the effects of higher prices.
The report shows inflation up from last year for a wide range of categories including: food and non-alcoholic beverages; clothing and footwear; miscellaneous goods and services; and furniture and household goods. The ONS said the inflation rate of these were the “highest seen for several years”. And in its commentary about the figures, the ONS noted that food price inflation has now been increasing for the past nine months.
The 12-month inflation rates for some of the broad groupings (namely food and non-alcoholic beverages; clothing and footwear; miscellaneous goods and services; furniture and household goods) have edged up to the highest seen for several years.
UK Consumer Price Inflation: July 2017, Office for National Statistics
A fall in consumer spending suggests that Britons are feeling the price rises and now reining in their spending. Indeed, Sky News has a report on figures released by BRC showing a fall in consumers hitting the high street to do their shopping as well as cutting down their spending in casual dining and leisure trips.
Inflation rises in these and other areas were offset by falling motor fuel prices, which made the largest downward contribution change to July’s inflation rate. You can see more from the report at ons.gov.uk.
The ONS will publish its labour market report for July tomorrow so we’ll see if there’s better news for wage growth.