Shock jump in inflation in July
Inflation rises unexpectedly in July, which means bad news for rail passengers.
The Office of National Statistics has confirmed that the Consumer Prices Index (CPI) annual measure of inflation rose to 2.6% in July.
The Retail Prices Index (RPI) measurement also rose, from 2.8% to 3.2%.
The jump in was partly due to the increasing cost of transport (in particular air fares), clothing and footwear.
This follows a sharp fall in June, with the CPI measurement dropping from 2.8% to 2.4%, while RPI fell from 3.1% to 2.8%. Many retailers launched their summer sales early this year following the wet spring and early summer.
Inflation tracks how the cost of living is increasing. It’s also used to help work out changes in pensions, benefits and things like rail fares.
The Bank of England has a 2% target for inflation, a target it has consistently failed to hit. However, in its inflation forecast last week, the Bank suggested inflation is likely to fall below its target at some point later this year.
This month's figures are particularly important for rail commuters, as July's RPI figure is used to set the following year's fare increases. If the Government continues with its policy of allowing rail operators to increase season tickets by RPI + 3% in England it means the average commuter will pay 6.2% more for their season ticket from January. In Scotland, the figure is RPI + 1%. The Welsh and Northern Irish Assemblies have yet to announce their figures.
Demonstrations about the high cost of rail travel have been staged at major railway stations around the UK today.
More on the economy
Why the banks are stil strangling British business
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But surely the big towns and cities are where the majority of jobs are, so choosing not to live in them may well mean taking your chance on not finding a job?
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I think my designing tools to supply to Mini and Land Rover plants and British Gas helps a bit more than my car boot activities, Mike. I also do my best to try and encourage youngsters to get into engineering and electronics and have given my stepson and eldest son the knowledge to now run their own businesses. Yes, we always need to manufacture more, but the UK is a mighty force in the world economy and we need to stop talking it down. My local college has had around £9M to spend on rebuilding and upgrades in the last four years so there is certainly investment in schools which has continued under the present government. British industry is pretty efficient, particularly the car production here. That ABBA thing was a bit of a myth, but I take your point about diversity of exports. Growth isn't stagnant here, the official figures are lagging behind the actual situation. I don't disagree with your interpretation of what you perceive as the state of British industry, but we are doing a lot better than some figures suggest and very much better than some of our European neighbours. I certainly am old enough to remember Abba, particularly the leggy Anna.
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@electricblue, we aren't producing enough. That is why growth is stagnant. We need to produce not only goods, but other things. Wealth is goods and services. Even your stall on a weekend car boot sale is contributing to the wealth of the nation. We do need people making films and other entertainment, new television programmes, even rock bands being a success. You're probably too young to remember when ABBA exported more than Volvo to become Sweden's top foreign currency earner. We also need to maintain wealth, spend money on maintaining out schools and hospitals. In a recession maintenance is bound to be cut, but not to the point where it will cost more in the long run. We also have to increase efficiency, with less politically correct nonsense. The success in the boom years of the 1960's wasn't just industry churning out goods, it was also bands like the Stones and the Beatles and many more selling on a international scale. We also had some good fashions and there were jobs for young people. I seem to remember someone saying we had never had it so good...
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16 August 2012