According to latest data from the Office for National Statistics, inflation rose to 2.7 per cent in August– a six-month high– amid bigger-than-usual seasonal increases in sea and air fares and higher theatre admission prices.
Mike Hardie, head of inflation at the ONS, added: “Consumers paid more for theatre shows, sea fares and new season autumn clothing last month.
“However, mobile phone charges, and furniture and household goods had a downward effect on inflation.”
Suren Thiru, head of economics at the British Chambers of Commerce (BCC), fears that a no-deal Brexit could shove inflation higher as he told media: “…The strong growth in producer prices indicates that inflationary pressures further down the supply chain remain significant and could lift inflation higher in the coming months. However, the upward pressure on prices remains transitory, and inflation should resume its ease back towards target once the impact of the recent increase in oil prices drops out of the calculation.
“The possibility of a disorderly Brexit is the key risk to the UK’s outlook for inflation as it could result in a substantial decline in sterling, which could significantly increase inflation and exacerbate the financial squeeze on consumers and businesses.”