Inflation to remain low despite fuel price uptick
Figures this week are expected to show inflation remaining well below Bank of England targets despite a potential uptick in fuel prices.
Last month it emerged that the annual rate of consumer price inflation had picked up slightly, increasing to 0.6 per cent in June, although it is still well below the central bank’s target of 2 per cent. Increasing prices for clothing and games were the main reasons the rate rose for the first time this year.
Russ Mould, investment director at AJ Bell, said: “Fuel costs may have gone up a bit this time round and it will be interesting to see if any other costs start to tick up because of the effects of the pandemic, or the Bank of England’s money printing or the government’s spending and increased budget deficit – look at how inflation expectations in the US are slowly ticking up.
“This matters as inflation could hurt consumer confidence if it starts to leave wage growth well and truly behind.”
Official inflation figures will be released on Wednesday.