Inflation falls

The UK’s annu­al infla­tion rate fell to 6.8% in July, down from 7.9% in June, accord­ing to the lat­est data from the Office of Nation­al Sta­tis­tics (ONS).

It is the small­est increase in the cost of liv­ing since Feb­ru­ary 2022.

A fall in gas and elec­tric­i­ty, as well as a slow­ing down in the increase of food prices, are the major dri­vers behind the infla­tion rate decrease, accord­ing to the ONS.

How­ev­er, core infla­tion, which strips out volatile items such as fuel and food remained unchanged at 6.9% in July while ser­vice sec­tor infla­tion rose from 7.2% to 7.4%.

Mar­tin McTague, Nation­al Chair of the Fed­er­a­tion of Small Busi­ness­es (FSB) said:

‘While a drop in infla­tion pro­vides some com­fort, the fig­ures show less of a drop in infla­tion than hoped for and will renew fears of a wage-price spi­ral, and of yet more base rate hikes in future.

‘The wor­ry now is that ris­ing wages ignite a fresh wave of infla­tion in Sep­tem­ber, which will threat­en the momen­tum from June’s GDP growth.

‘The cost of doing busi­ness cri­sis still has a grip on the small busi­ness com­mu­ni­ty, as prices for many key inputs, from ener­gy to com­po­nents and raw mate­ri­als, remain far above where they were a year ago.

‘Any reduc­tion in infla­tion is good news, but the huge toll that spi­ralling prices have inflict­ed is still being keen­ly felt by small firms.’

Inter­net link: ONS web­site FSB web­site