Latest Inflation Figures Higher Than Expected
There is more bad news for families living in the UK today, who are struggling to budget their household bills and would welcome an interest rate cut to reduce the cost of their mortgages and loans, as the Office for National Statistics released the latest figures for the rate of inflation for the previous month.
The Consumer Prices Index (CPI) rose again during the month of July to reach a figure of 4.4 per cent, an increase of 0.6 per cent since June. This is much higher than anticipated, with most experts predicting the rate of inflation to be only at 4.2 per cent.
The overall figures for inflation have been distorted by above average price increases in food items and petrol, along with gas and electricity prices. The CPI rate for food products increased in July to 13.7 per cent, from 10.6 per cent in June and the rate of increase for gas and electricity bills is even worse, with the rate of CPI increasing to 16.1 per cent in July from 13.8 per cent in the previous month. The predictions from analysts is that the rate of inflation is likely to continue to increase over the next few months.
Vicky Redwood, an economist with Capital Economics, said “Even with the recent drop in oil prices it still looks possible that inflation will hit 5 per cent within two or three months as the latest round of utility price hikes affect the index.”
There could be some good news for those individuals with loans and mortgages however, as it is still possible that there may be an interest rate cut in the near future, due to the fact that the high rate of inflation is mainly due to external factors, rather than the overall economy.
