Inflation dips to 2.8%
INFLATION dipped by 0.1% last month to 2.8%, according to official figures.
The Office for National Statistics said the largest contributions to the fall in the rate came from air fares and price movements in recreation and culture.
The clothing and footwear sectors also contributed to the headline Consumer Prices Index (CPI) rate but a rise in petrol and diesel prices partially offset the fall.
The Retail Prices Index (RPI) came down from 3.3% to 3.1%. This measure, which also includes housing costs, is used to set January’s rail fares at a rate of RPI plus 1%.
Phil Gooding from the ONS said the cost of toys, games and package holidays, air fares, clothing and footwear had pulled CPI inflation lower, despite rises in the cost of petrol and diesel during July.
Dr John Ashcroft, chief economist at Greater Manchester Chamber of Commerce, said: “Towards the end of the year, we expect inflation to fall to around 2.4%, below the threshold 2.5% included in the forward guidance schedule but still above the 2% CPI long term target.”
With the RPI figure putting rail fares in the spotlight, Darrell Matthews, regional director at the Institute of Directors, said rail operators must look at “major reforms”.
He said: “Inflation is just part of the problem, and operators must look at major reforms to bring their service into line with modern living and working practices.
“It is absurd that there is no option for an off-peak season ticket, when so many IoD members support flexible working among their staff. Many of these employers would be quite happy for staff to arrive at work after 10am, which would dramatically reduce the cost of a season ticket. Outdated concepts of 9-5 working are holding ticket prices in a time warp, and flexible lives should be reflected in flexible ticket structures.”
