Fuel prices push up UK inflation rate to 0.6%
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.
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 prices of finished 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.