Deep squeeze on for millions

Cost of food, clothes and entertainment rise

THE cost of living has jumped to a six-month high – despite experts predicting a fall.

The official consumer price index measure of inflation rose from 2.5% in July to 2.7% in August. Economists had been forecasting it would dip to 2.4%. The Office for National Statistics said the rise had been driven by higher prices for autumn clothes, ferries and theatre tickets. The price of groceries also saw an increase. John McDonnell, Labour Shadow Chancellor, said: “These figures show that prices in Britain are again rising faster than pay for most workers. “More than eight years of failed Conservative mismanagement of the economy means real wages today are lower than in 2010, and today’s figures show the squeeze is only worsening.” TUC General Secretary Frances O’Grady said: “The pay squeeze is tightening again, but the Government is doing nothing to get wages rising faster. The minimum wage should be put up to £10 an hour as quickly as possible.”

The pound rose to more than $1.32 against the dollar on the back of the figures. Against the euro, it was up by 0.1% to 1.12.

According to the ONS, food prices rose 0.3% in August, and 2.1% on a 12-month basis.

Fish, vegetables, sugar and confectionery went up the most.

Households were also hit by higher fuel prices.

The retail price index, a separate measure of inflation that includes housing costs, rose from 3.2% to 3.5%.

CPI hit 3.1% last November when prices were driven up by a period of sterling weakness following the Brexit vote.