New figures released by the Office for National Statistics has showed that the UK’s inflation rate is as high as it has been in five years, with the August rate rising to 2.9%.
Up from 2.6% in July, the figures are derived from the Consumer Price Index, which showed that the rising cost of petrol and clothing are contributing factors.
The catalyst for the rising prices, according to the Office for National Statistics, was the UK’s vote to leave the European Union last year, which lead to a dramatic fall in the value of sterling. This has lead to the August UK inflation rate hitting 2.9%.
In June, the UK’s inflation rate was reaching similar levels amid economic ‘caution’.
The rise was bigger than many expected. The statistics showed that clothing and footwear had the biggest impact on inflation, climbing 4.6% compared to the same time last year.
Trade Union Congress general secretary Frances O’Grady said that the inflation rate is rising faster than wages, creating a “cost of living squeeze”. O’Grady is urging the Conservative government to “get a grip and get pay rising across the country”.
"It is pretty remarkable that, with inflation near 3% and unemployment at the lowest level in over 40 years, we are not seeing much wage inflation," added Ian Stewart, chief economist from Deloitte.
It is expected that inflation will rise further and reach 3% in October, but should slow down in 2018.
The Bank of England was targeting just a 2% inflation rate in August, which has proved to be a somewhat wayward aim.