Inflation rises to 2.9 per cent as businesses continue to face cost pressures
The UK inflation rate has risen to 2.9 per cent in the 12 months to July, the Office for National Statistics (ONS) has announced. This compares to the rate of 2.6 per cent announced last month for the year to June.
Research from Greater Birmingham Chambers of Commerce (GBCC) Quarterly Business Report has also revealed that inflation is the most cited pressure among businesses, with 28 per cent of firms identifying it as a concern.
The main factor contributing to the rise was energy regulator Ofgem's 13 per cent increase in the price cap on household gas and electricity bills which came into force on 1 July.
Paige Bowyer (pictured), policy and research analyst at Greater Birmingham Chambers of Commerce said: “Inflation rising to 2.9 per cent in July is a reminder that the path towards lower and more stable prices remains uncertain, with businesses continuing to face a range of cost pressures.
“Higher household energy bills, partly driven by the ongoing impact of the conflict in the Middle East, contributed to July’s rise. With energy prices expected to remain a source of inflationary pressure in the coming months, businesses remain exposed to higher costs, particularly as they are not protected by a household price cap.
According to the ONS, inflation on clothing and footwear increased by 0.5 per cent after falling in June.
Meanwhile, motor fuel price rises eased to 15.5 per cent compared to an increase of 21.3 per cent in the 12 months to June.
Paige Bowyer continued: “With the Autumn Budget approaching, businesses need to see measures that help reduce the cost of doing business and provide greater certainty, including a package of support on energy costs and business rates.
“Creating the right conditions for firms to invest, recruit and grow will be essential to strengthening economic growth.
“Take part in our latest Quarterly Business Report survey and help us understand how firms are navigating the current economic environment.”
