• Annual CPI inflation up from 2.4% in June to 2.6% in July
  • Annual RPI inflation up from 2.8% in June to 3.2% in July
  • The largest upward pressures on inflation came from airfares and clothing and footwear

Commenting on the inflation figures for July 2012 published today by the ONS, David Kern, Chief Economist at the British Chambers of Commerce (BCC), said:

“The inflation figures for July recorded an unexpected rise. Despite this setback, the downward trend in inflation seen in recent months is likely to continue. There is a realistic chance that inflation will be down to 2% by the end of the year, and will fall slightly below this target during 2013. However, the inflation figures for July show that there is no room for complacency. Recent increases in world food prices because of the drought in the US provide a reminder that there are still upward pressures.

“Since inflation has been above the 2% target for a prolonged period, a temporary fall below this target should not be a cause for concern. If inflation does fall, the economy would benefit since the squeeze on businesses and consumers would support demand in the economy. With this in mind, the Bank of England should not use additional Quantitative Easing, which concentrates solely on buying gilts, to limit temporary falls in inflation.”

Notes to editors:

ONS: http://www.ons.gov.uk/ons/rel/cpi/consumer-price-indices/july-2012/index.html

The British Chambers of Commerce (BCC) is the national voice of local business.

The BCC sits at the heart of a powerful nationwide network of Accredited Chambers of Commerce, serving over 100,000 businesses across the UK, which employ over five million people. For more information visit: www.britishchambers.org.uk

Media contacts

Liz Larvin
T: +44 [0]20 7654 5813
M: +44 [0]7825 746812

Lisa Morrison
T: +44 [0]20 7654 5812
M: +44 [0]7717682221