Annual CPI up from 4.2% in June to 4.4% in July
Annual RPI unchanged in July at 5.0%
Commenting on the inflation figures for July, published today by ONS, David Kern, Chief Economist at the British Chambers of Commerce, said:
“The increase in CPI was broadly as expected, but the unchanged RPI figure slightly better than predicted. Higher utility prices will likely push up inflation further over the next few months to around 4.8%, lower than the figure predicted by the Bank of England.
“While rising inflation will be uncomfortable for the MPC, the worsening prospects for global growth will reinforce the downward pressures on energy and commodity prices. This increases the likelihood that UK inflation will fall steadily throughout 2012.“The international factors pushing up UK inflation are temporary, adding to the pressures felt by businesses and consumers. The government must continue with measures to reduce the deficit, and the MPC must maintain interest rates at current low levels until at least early 2012. If signs of weakness in the economy worsen, the MPC should give consideration to increasing its QE programme beyond £200bn.”