The Office for National Statistics (ONS) reported a rise in the UK Consumer Prices Inflation (CPI) rate from 2.0% to 2.1% pa in July 2019.
The unexpected figure rose above the Bank of England’s 2.0% pa target for the first time since April and was higher than the market expectation of a fall to 1.9% pa.
The Consumer Prices Index including owner occupiers housing costs (CPIH) was also up from 1.9% in June 2019 to 2% in July 2019.
Prices of games, toys and hobbies and accommodation services contributed to the rise. Downward contributions came from transport services, domestic fuels gas and electric.
We still go by the old measure of inflation, Retail Prices Index (RPI), as many pension funds are still linked to this. RPI fell back to 2.8% pa in July from 2.9% pa in June.
That said, both are still above targets and with record, increased employment rates in the UK as well as wage increases running at 3.7% pa, prices look ste to rocket and may force the Bank of England's hand to increase interest rates at a time when it would rather not given global economic slowdown and Brexit uncertainty.