Breaking news: Inflation rises to 4.4%

INFLATION resumed its upward trend in July according to new figures released this morning.

The rate of CPI inflation rose from 4.2% in June to 4.4% in July, underlining the Bank of England’s recent forecast that it will hit 5% later this year before falling away.

Transport costs, including a rise in flight prices of 9.8%, and rent rises were the main factors behind the latest increase, according to the Office for National Statistics.

Significant downward pressures on CPI inflation included a 3.5% decline in clothing and footwear prices  and a 1.1% fall in furniture prices.

The RPI inflation rate held steady at 5% in July, unchanged from June. The July figure is important to rail travellers as it is used to calculate rises in fares.

Coverage of the latest inflation figures is brought to TheBusinessDesk.com’s readers in association with stockbrokers Redmayne-Bentley.

Senior stockbroker David Scott said: “After today’s inflation numbers, which came bang in expectation at 4.4% for CPI – up from 4.3% – and RPI at 5%, the Bank of England Governor Sir Mervyn King will now have to write his seventh letter of apology in a row to the Chancellor and his 12th in total, explaining why inflation remains so far above target.

“This follows on from the quarterly inflation report last week which repeated that the Bank expects inflation to rise above 5% in the next few months before coming down sharply next year. The rapidly cooling economies at home and abroad are indicating a very sharp fall in UK inflation going into next year.”