After a promising few months of falling inflation in the UK, it appears that such an outcome wasn’t able to extend into July 2024, with headline inflation once again rising to 2.2 percent.
This is according to the latest CPI figures, collected by the Office of National Statistics (ONS), which showed that, despite food inflation remaining unchanged at 1.5 percent, overarching inflation rose for the first time this year.
An uptick could be seen among almost all categories, including clothing and footwear, for which inflation rose from 1.6 percent in June to 2 percent. Prices for this category, however, were all down on the month before, as noted by Kris Hamer, director of insight of the British Retail Consortium (BRC).
Elaborating on the results, Hamer said: “Despite prices falling month-on-month, headline inflation returned above the Bank of England’s 2 percent target. This was mainly driven by slowing deflation for gas and electricity bills, which had seen big price drops in July 2023 compared to this year.”
He added that, with headline inflation “showing signs of rising further”, retailers could possibly be facing another increase in business rates next year.
Hamer continued: “This penalises the retail industry, as retail products currently have generally lower inflation levels than the headline figure on which business rates rises are based. The Government should buy into retail by ending the 14 years of Conservative business rates rises, which have seen the multiplier increase by a third since 2010, harming the viability of many high street stores across the country.”
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