Inflation hits 4.5%

THE headline rate of inflation continued its upward trend last month rising to 4.5%, according to data published this morning.

The annual rate of CPI inflation rose from 4.4% in July with the Office for National Statistics pointing to clothing and footwear, electricity and gas bills and household goods as the largest factors behind the rise.

Transport costs and the price of goods such as computer games and children’s toys were the most significant brakes on rising inflation.

The RPI rate of inflation, which includes mortgage costs, rose from 5% to 5.2% in August.

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

Tim Whitehead, from Redmayne-Bentley, said the rise in CPI was broadly in line with market expectations.

He said: “Fuel prices were 17% higher over the past 12 months but analysts expect a gradual weakening in commodity costs as fears intensify over the rate of global growth. 

“The Bank of England anticipates that CPI will move toward 5% before the end of the year.  Interest rates are not likely to increase, however, as these could further undermine an already fragile economy.”