- The Consumer Prices Index rose by 0.6% in the year to July 2016, up from 0.5% in June
- Rising prices for motor fuels, alcoholic beverages and accommodation services, and a small fall in food prices than a year ago, were the main contributors to the increase in the rate
Commenting on the inflation figures for July 2016, published today by the ONS, Suren Thiru, Head of Economics at the British Chambers of Commerce (BCC), said:
“While still weak by historic standards, we expect this rise to be the start of a prolonged period of increasing prices, as the post-EU referendum slide in sterling feeds through to high input costs.
“Higher inflation squeezes consumer spending and increases cost pressures on businesses. However, if economic growth slows as many expect, then price rises are likely to be limited. Such a scenario will not dissuade the MPC from cutting interest rates further in the coming months.
“The Bank of England has largely exhausted the monetary policy tools available. The government must use the Autumn Statement to stimulate economic growth, providing greater support for businesses looking to invest.”