Rise in inflation rate for first time this year
The rate at which prices are going up has increased for the first time this year, rising to 2.2% in the year to July.
The latest figures from the Office for National Statistics (ONS) have revealed that inflation ticked up a little in July, slightly higher than the Bank of England’s 2% target.
ONS Chief Economist Grant Fitzner said that although domestic energy costs fell, they fell by less than a year ago.
“This was partially offset by hotel costs, which fell in July after strong growth in June,” he said.
“The increase in cost of goods leaving factories slowed a little in the year to July, led by falling petrol prices. Meanwhile, raw materials prices picked up for the first time in over a year, driven by smaller falls in gas and electricity costs,” he said.
Food and non-alcoholic beverage prices rose by 1.5% in the year to July, the same rate as the year to June. This figure is the joint lowest annual rate since October 2021, when it was 1.3%, and it is the first time since March 2023 that the annual rate has not eased, having seen 15 consecutive months of slowing prices before then.
Prices for this division were unchanged between June and July 2024, compared with a monthly rise of 0.1% a year ago. The ONS states that prices have been relatively stable since early summer 2023, compared with sharp rises over the previous 12 months.
The annual rate of 1.5% in July 2024 compares with 14.9% in July 2023.
Downward contributions to the change in the annual rate of inflation between June and July 2024 came in four of the 11 food and non-alcoholic beverage classes – bread and cereals; fish; vegetables; and mineral waters and soft drinks.
Upward contributions in three classes came from a combination of milk, cheese and eggs; fruit; and sugar, jam and honey. Four classes remained the same.
Products in this division that provided a notable downward contribution to the change in the annual rate included fresh orange juice, sponge cake, canned tuna and cheese spread. While products in this division that provided notable upward contribution to the change in the annual rate included packs of individual cakes, slices pre-packed ham, milk and large chocolate bars.
