The Consumer Price Index (CPI) today released its official monthly report announcing that UK inflation rates have risen 0.5% up from 0.3% in May 2016.
The Office of National statistics states, that although the June figure increased month-on-month, it is still ‘relatively low historically’.
The recent EURO 2016 tournament could be a leading factor in the results as the popular tournament caused a rise in air travel fares and prices for fuel on top of high consumer spend.
The main points from the report show that transport prices grew by 1.1% from May this year compared to a rise of 0.2% in the previous year. As with Air travel, the rise is due to a 10.9% growth in fares which was its largest movement between the months May and June on record. Petrol (111p June) and diesel (112.1p June) prices also increased by 2.3p and 2.6p per litre.
Other smaller upward trends consisted of a 0.6% rise in Recreation and Culture compared to a fall of 0.1% in 2015 as well as a rise in communication as telephone equipment and services had a 0.6% rise between May and June in contrast to a 0.2% fall in the same period last year.
Household maintenance, equipment and furniture prices overall dropped 0.3% compared to a 0.3% rise in 2015. The fall is considered to be due to a downward trend in furniture and kitchen unit prices.
Following the recent sharp drop in the pound, it is thought that inflation prices may increase as imports into the UK will become more expensive. The Office of National statistics however have said that it is still too early to see the impact on inflation and the drop in the value of the pound following the EU Referendum vote.
19/07/2016