NECC respond to latest Inflation figures
The annual inflation rate rose to 4.5% in August, according to figures released today by the Office for National Statistics.
The latest rate is still 2.5% above the Bank of England’s 2% inflation target, though the Bank have attributed this difference to global energy increases and 20% VAT.
Clothing and footwear in particular were identified as the main fuel for rise, with a 3.7% monthly increase between July and August.
Downward pressure on the index came from passenger transport services, by air, sea and rail.
The price of toys and computer games was also noted to have fallen since July.
Many economists have speculated that inflation is likely to peak at 5% before gradually reducing.
Mark Stephenson, policy advisor at the NECC reiterated this, commenting that the figures were of no surprise and that he expected “inflationary pressures” to peak soon.
He said: “Increased inflation is a double edged sword.
“While many see it as a reflection of growth, it also places unwelcome cost pressures on businesses, especially as sources of finance are looking increasingly uncertain.”
Mr Stephenson went on to say that the future looks uncertain, which is not good news for businesses, many of which are in desperate need of support.
The Financial Times reports that the UK trade deficit remained at £4.5bn through July into August as higher exports were counterbalanced by higher imports.