- Annual CPI inflation at 4.5% in August, up from 4.4% in July
- Annual RPI inflation at 5.2% in August, up from 5.0% in July
Commenting on the inflation figures for August, published today by the ONS, David Kern, Chief Economist at the British Chambers of Commerce, said:
“The modest increase in CPI inflation during August was broadly in line with expectations. Higher utility prices will likely push up inflation a little further. We expect inflation to peak at 4.7% or 4.8%, lower than the five percent predicted by the Bank of England. All the evidence suggests that inflation will peak over the next few months, before falling significantly throughout 2012.
“The worsening prospects for global growth will reinforce the downward pressures on energy and commodity prices. The factors pushing up UK inflation are mostly temporary, though are at present intensifying the squeeze felt by businesses and customers. While higher inflation is uncomfortable for the MPC, it should be reassured that inflation is now near its high point for the year. Interest rates must be maintained at current low levels until at least the third quarter of 2012. If the economic situation shows signs of worsening, urgent consideration should be given to increasing the quantitative easing programme.”