Current Inflation Rate – CPI record leap in July 08

The annual consumer prices index (CPI) rose to 4.4% in July 2008, up from 3.8% in June the largest single rise since official records began in 1997.  The biggest single contributing factor to the jump in inflation was a 12.3% rise in prices of food and and non-alcoholic beverages.

Agricultural commodity prices have increased significantly.  Meat prices rose 16.3% year on year and bread and cereals by 15.9%.

Rises in petrol prices and the cost of air paseenger transport also had a part to play in pushing the CPI upwards.

The retail price index (RPI) rose to 5.0% in July from 4.6% in June.  The upward pressure on RPI was dampened by figurs for house price depreciation which are excluded from the CPI.

David Kern, economics adviser at the British Chambers of Commerce said:

The rise in July annual CPI inflation was slightly higher than expected. But the new figures do not yet take account of the recent large falls in oil prices. Lower than expected producer prices support our view that CPI inflation will reach its peak within the next two or three months.