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UK inflation rate rises to 0.6% Fuel prices push up UK inflation rate to 0.6%
(about 1 hour later)
Rising fuel prices helped to push the UK's inflation rate higher last month, official figures show. Rising fuel prices helped to push the UK's inflation rate higher last month, according to official figures.
Inflation as measured by Consumer Prices Index (CPI), rose to 0.6% in July from 0.5% the month before, the Office for National Statistics said. The annual inflation rate as measured by the Consumer Prices Index (CPI) rose to 0.6% in July from 0.5% in June, the Office for National Statistics said.
More expensive alcoholic drinks and hotel rooms also helped to increase the CPI rate, the ONS said.More expensive alcoholic drinks and hotel rooms also helped to increase the CPI rate, the ONS said.
The Retail Prices Index (RPI) measure of inflation rose to 1.9% in July from 1.6% in June.The Retail Prices Index (RPI) measure of inflation rose to 1.9% in July from 1.6% in June.
July's RPI inflation rate sets the cap for how much regulated rail fares in England, Scotland and Wales can rise by next year.July's RPI inflation rate sets the cap for how much regulated rail fares in England, Scotland and Wales can rise by next year.
Pricier imports
Separate figures from the ONS suggested that the fall in the value of the pound since the UK's referendum vote to leave the EU had increased the cost of imports for manufacturers.Separate figures from the ONS suggested that the fall in the value of the pound since the UK's referendum vote to leave the EU had increased the cost of imports for manufacturers.
Input prices faced by manufacturers rose 4.3% in the year to July, compared with a fall of 0.5% in the year to June.Input prices faced by manufacturers rose 4.3% in the year to July, compared with a fall of 0.5% in the year to June.
The most dramatic rises came in the cost of imported food materials, which rose 10.2%, and the price of imported metals, which rose 12.4%.
In addition, the price of goods leaving the factory gate were 0.3% higher than a year earlier, the first annual increase since June 2014.In addition, the price of goods leaving the factory gate were 0.3% higher than a year earlier, the first annual increase since June 2014.
"There was no obvious impact on today's consumer prices figures following the EU referendum results though the Producer Prices Index suggests the fall in the exchange rate is beginning to push up import prices faced by manufacturers," said Mike Prestwood, head of prices at the ONS. "There is no obvious impact on today's consumer prices figures following the EU referendum result, though the Producer Prices Index (PPI) suggests the fall in the exchange rate is beginning to push up import price faced by manufacturers," said Mike Prestwood, head of prices at the ONS.
"These are the first sets of consumer and producer prices data collected since the referendum polling day." However, Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said the fall in sterling was "entirely responsible" for the rise in CPI inflation.
Against the dollar, the pound is some 13% below its level in the run up to the referendum and 10% lower against the euro.
"Sterling's depreciation ensured that pump prices rose by 0.7% month-to-month even though dollar oil prices declined," he said.
"Labour market weakness might constrain wage growth soon, but with productivity also likely to fall sharply as the economy slows, firms' cost pressures will remain intense.
"As a result, we continue to think that CPI inflation will hit 3% in the second half of 2017."