UK inflation rises to 1.9% in June, figures show

The new statistics may increase the pressure on policy-makers as to when to enforce an increase in interest rates

Inflation in the United Kingdom rose sharply in June but still remains lower than the Bank of England target, official figures showed today.

Inflation rose to 1.9 per cent in June - just short of the Bank of England's 2 per cent target set for nine years, according to figures released by the Office for National Statistics (ONS).

However, it did mark the highest rate increase in the Consumer Price Index (CPI) since January this year, and a sharp upturn in comparison to the four-and-a-half-year low of 1.5 per cent recorded in May.

The new statistics may increase the pressure on policy-makers as to when to enforce an increase in interest rates, which have been at the historic low of 0.5 per cent for more than five years.

But the figures from the Office for National Statistics (ONS) also mean that CPI has been at or below the 2 per cent target for seven months in a row, the first time this has happened since 2005.

Inflation had been dragged down by the supermarket price war which saw food and non-alcoholic drinks costs fall in May but these were flat in June.

Meanwhile clothing and footwear prices rose month on month at a time when they are usually falling - as this time stores held off on summer discounts as warm weather brought shoppers out.

Furniture, air fares and sea transport also had an upward effect but petrol prices went up by less than the same month a year before.

Despite the drop in inflation, it remains well above the rate of wage increases, which were last recorded at 0.7 per cent, meaning real-terms pay is still stalling. Figures to May will be published tomorrow.

Today's data showed the Retail Prices Index (RPI) measure of inflation, which includes housing costs, rose from 2.4 per cent to 2.6 per cent.

Additional reporting by PA

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