The UK’s inflation rate hit its joint highest level in more than five years in August, driven by rising clothing and petrol prices.
UK inflation measured by the Consumer Prices Index rose to 2.9 percent in August, according to statistics from the Office for National Statistics released on Tuesday, up from 2.6 percent in July.
Air fares rose between July and August, alongside a jump in clothing and motor fuels prices. Clothing and footwear rose 4.6 percent year-on-year, hitting their highest level since records began, partly because of rising import costs for retailers in the wake of Brexit.
Petrol increased by 1.8p a litre to 115.7p during the month, while diesel gained 2p to 117.6p.
Maike Currie, investment director for personal investing at Fidelity International, said: “The tightening squeeze on cash-strapped UK households continues, with August’s inflation figure showing the CPI (Consumer Price Index) climbing to 2.9 percent, far out-pacing the growth on our pay packets.
“Fleeting inflation and tepid economic growth, means the Bank of England is unlikely to turn off the taps of monetary stimulus too quickly. So despite the hawkish crows, the doves should continue to rule the roost. That’s good news for borrowers, bad news for those leaving their money languishing in cash and even more reason to stick with a seasoned stock picker who can roll up their sleeves and use the resources and insight at their disposal to unlock those ever elusive returns.”