Squeeze on consumer incomes tightens as food prices rocket 12.7%, with bread, cereals, milk, cheese and eggs becoming dearer
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said core inflation which strips out food and energy should drop sharply towards the end of the year, sooner than the Bank of England expects.
Looking ahead, the headline rate of CPI inflation looks set to fall a little in August and September, as the recent fall in oil prices gets passed on to consumers at the petrol pump.
Indeed, we think that motor fuel’s contribution to the headline rate will be 0.5 percentage points smaller in September than in July, if the Brent crude price remains near its current $92pb level.
I understand that times are tough, and people are worried about increases in prices that countries around the world are facing.
Although there are no easy solutions, we are helping where we can through a £37bn support package, with further payments for those on the lowest incomes, pensioners and the disabled, and £400 off energy bills for everyone in the coming months.
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