The UK inflation rate has increased to 3.0% from 2.9% and is now at its highest rate since March 2012, causing concerns about whether interest rates will now need to rise. The increase in inflation will also hit businesses, with business rates now rising by 3.9% over the next tax year.
The figures were released by the ONS and were mainly affected by rises in food prices, recreational goods and transport costs. The figures were also offset by a fall in the increase of clothing prices, with the ONS noting:
“The depreciation of sterling seen in 2016 and particularly following the outcome of the EU referendum would increase the prices producers pay for imported goods. Whilst depreciation is likely to increase the cost of imports, other factors determine whether these are passed on to consumers. For example, there were reports of businesses having measures to protect against exchange rate changes in the short-term, often reported as being up to spring this year”.
The organisation added:
“Prices in all broad categories were higher in September 2017 than a year ago. The rate of 2.6% for recreation and culture is the highest since January 2010, whilst the rate of 3.1% for food and non-alcoholic beverages is the highest since October 2013”.