· CPI inflation was running at an annual rate of 0.6% in August 2016, unchanged from July.
· The main contributors to inflation were rising food prices and air fares, which were slightly offset by a fall in the price of motor fuels
Commenting on the inflation figures for August 2016, published today by the ONS, Suren Thiru, Head of Economics at the British Chambers of Commerce (BCC), said:
“While the inflation rate was unchanged in August, price growth is likely to resume its upward trend in the coming months. The marked pick-up in the cost of raw materials suggests that the declining value of the pound is already feeding through into input costs and is likely to push inflation higher in the near-term.
“A future rise in inflation will likely dampen household spending by eroding consumer spending power, but price rises will be dampened if the UK economy slows as we predicted in our economic forecast earlier this week.
“The priority for the government and Bank of England must be to boost business confidence by supporting business investment and increasing investment in our infrastructure.”