- The Consumer Prices Index rose by 0.5% in the year to June 2016, from 0.3% in May
- Rises in air fares, prices for motor fuels and a variety of recreational and cultural goods and services were the main contributors to the increase in the rate
Commenting on the UK inflation figures for June 2016, published today by the ONS, Suren Thiru, Head of Economics at the British Chambers of Commerce (BCC), said:
“Despite the rise seen in June, UK inflation remains in line with the weak trend we’ve seen so far over the past year.
“In the short-term, we expect the recent fall in sterling to push inflation higher in the coming months. There is a risk that higher inflation will squeeze real earnings, which could in turn halt the recent surge in consumer spending – a key driver of UK economic growth.
“Over the longer-term, price growth is more uncertain, as inflation is likely to face conflicting pressures from a weakening currency and a slowing economy.
“A key priority for the Bank of England should be to maintain monetary stability. While the MPC is likely to ‘look through’ any currency fuelled rise in inflation, it must not jump the gun on cutting rates until the economic picture becomes a bit clearer to avoid exacerbating the mounting price pressures that businesses and consumers are likely to face.”