World Economy

UK Inflation Rises for First Time Since November

Transport tickets and fuel have driven up costs for consumers.Transport tickets and fuel have driven up costs for consumers.

Inflation in the UK climbed in the month of the July, as had been expected, according to the latest data from the office for national statistics released on Wednesday.

The ONS reported that the rate of consumer price inflation, the most watched measure, increased from 2.4% in June, to 2.5% in July, reversing a trend of gradually declining inflation over the course of 2018, Business Insider reported.

CPIH, the ONS’ preferred method of measuring inflation was at 2.3% in July, unchanged from the previous month.

“Transport tickets and fuel, along with often erratic computer game prices, drove up costs for consumers,” the ONS’ head of inflation, Mike Hardie, said in a statement alongside the data release.

“On the other hand, there was a drop in prices for women’s clothing and footwear, and some financial services,” he added.

The removal of initial charges for investment in some unit trusts also played into the inflation figures.

 Risks From Food Shortages

Britain faces a “perfect storm” on food price inflation due to Brexit and recent extreme weather.

EY Item Club senior economist Howard Archer said food prices faced upside risk from the heatwave in the UK and Europe, which followed snow storms and poor weather in Q1.

Thomas Wells, manager of the Smith & Williamson Global Inflation-Linked Bond Fund, raised the same concerns, adding this looked set to be compounded by Brexit.

 “The ‘Beast from the East’ has meant that many early UK crops have been decimated or failed completely, and more recently the very hot weather has hit fruit and vegetable crops as there has not been enough rain, which will hit yields and quality,” he said.

“There are widespread reports of UK farmers sending livestock to slaughter early because there has been no grass for the animals to graze on, and those that have kept livestock have had to use winter feed or buy additional feed to keep their animals alive.

 “The UK seems to be facing something of a perfect storm when it comes to food prices–a terribly cold winter followed by a blistering summer, and no clarity on what tariffs will be applied–or how those tariffs will be enforced without creating major delays at transport gateways such as Dover–once we leave the EU.”

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