Inflation surges after biggest fuel price hike in nearly a decade

UK inflation jumped to its highest level for four months in July after the largest hike in fuel prices for nearly a decade, official figures have shown.

The Office for National Statistics (ONS) said Consumer Prices Index (CPI) inflation lifted to 1% from 0.6% in June.

A consensus of economists had predicted that inflation would stay flat at 0.6% for the month.

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The Retail Prices Index (RPI), another measure of inflation, also surged last month, to 1.6% from 1.1% in June.

RPI is used to calculate the cap on annual rail season ticket price increases in Britain.

The ONS said the leap in CPI came after petrol and diesel prices soared higher due to a rebound in global oil prices and as lockdown restrictions have begun easing worldwide.

A much smaller fall in the cost of women’s clothing last month compared with a year ago also drove the hike in the cost of living.

Jonathan Athow, deputy national statistician for economic statistics at the ONS, said: “Inflation has risen, in part, due to the largest monthly pump price increase in nearly a decade, as international oil prices rose from their lows earlier this year.

“The largest upward movement came from clothing where prices fell on the month but by less than a year ago, partly due to different sales patterns throughout the year so far.

“In addition, prices for private dental treatment, physiotherapy and haircuts have increased with the need for PPE contributing to costs for these businesses.”