The Office for National Statistics (ONS) has revealed that the UK’s Consumer Prices Index (CPI) increased by 0.1 per cent in July, turning the country’s UK inflation rate positive.
The ONS state that ‘‘a smaller fall in clothing prices on the month compared with a year ago was the main contributor to the rise in inflation.’’
However, a decrease in the price of food and non-alcoholic beverages prevented the UK’s inflation from rising any further.
Recently, the CPI has been over performing, staying flat for six months, with the index turing negative for the first time in nearly 60 years.
John Allan, national chairman of the Federation of Small Businesses (FSB) commented on the rise.
‘‘The CPI has hovered around this level since the start of the year, providing businesses with a steady period of low inflation. Many small firms are benefitting from the continued fall in oil prices and increased consumer spending.’’
‘‘Household disposable income has been boosted by several factors including low food prices, rising real wages and the strong pound which is making imports cheaper.’’
‘‘The Bank of England has indicated that it expects inflation to remain muted in the near-term and plans to keep interest rates steady until at least late 2015. When the time does come to move rates, we urge the Bank to raise gradually to allow businesses time to adjust.’’