Petrol prices push inflation to highest since April 2012
The oil barons are up to their dirty tricks again – stoking the corrosive mix of rising prices and falling wages which gnaws at the innards of sustainable rural communities. This article tells us
The rise in headline inflation to 2.9% will also pose a challenge for the new Bank of England governor, Mark Carney, and his fellow policymakers as they look for ways to boost Britain’s fragile recovery while keeping a lid on living costs. Still, the rate was not as high as the 3% forecast by economists and was well below the 3.1% level that would have forced Carney to write an explanatory open letter to the chancellor, George Osborne.
Economists warned that persistently high inflation would dampen optimism about Britain’s economic prospects following some recent upbeat news.
“There are growing signs of the UK recovery gaining momentum, with the economy set for strong growth in the second quarter and companies reporting the brightest outlook for the year ahead since the financial crisis struck, but inflation clearly remains the UK’s bugbear and calls into question just how long this strong growth can persist for,” said Chris Williamson, chief economist at the data specialists Markit.
“High prices look set to continue to erode spending power, curbing the overall pace of economic growth.”
The Office for National Statistics (ONS) said its consumer prices measure, based on a basket of goods and services, slipped 0.2% in June from May. But compared with a year ago they were up 2.9%, the highest annual inflation since April 2012. The biggest upward pressure came from petrol and diesel prices, which both rose by around a penny this June but fell in June 2012. There was also upward pressure from clothing prices after summer sales this year did not bring as many discounts as in 2012