Inflation shows surprise bounce

By DOMINIC JEFF
Published on 14/08/2012 09:52

Inflation in the UK unexpectedly jumped in July as retailers ended their discounting and air fares soared.

The rate of consumer price inflation (CPI) rose to 2.6 per cent last month, from 2.4 per cent in June, official figures show.

The retail prices index (RPI) figure for July, which is used to determine how much regulated rail fares including season and saver tickets are allowed to increase in 2013, rose to 3.2 per cent from 2.8 per cent the previous month, according to the Office for National Statistics.

The City had expected the rate to remain flat at 2.8 per cent.

The greater-than-expected rise in both measures of inflation was driven by hefty hikes in air fares, while there were fewer discounts from retailers who had already slashed prices in June to shift stock amid the wash-out weather.