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.

Royal Mail chairman Peter Long is stepping down just months after a shareholder revolt over its new chief executive’s bumper pay packet.The firm said Long was leaving after realising it was “no longer possible” to continue while also being executive chairman of estate agency chain Countrywide.He will leave immediately and be replaced by Royal Mail board member and former Axa Sun Life boss Les Owen.It comes after a row over a salary rise for its new Zurich-based chief executive Rico Back.Back is being paid a £640,000 annual salary, £100,000 more than predecessor Moya Greene.At Royal Mail’s recent AGM, 70% of shareholders voted against the firm’s pay plans. hit Businesses risk being surge in £800million-plus by an year. business rates next rise is based Next April’s rate of inflation on the CPI measure in September.August’s figure, If it stayed at 2.7%, to firms’ bills in it would add £819m to calculating England, accordingAltus. Of by industry experts fall on the that, £209m will hammered retail sector.

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Less than 1% of standard savings accounts pay more than the 2.7% rate of inflation. that do The four are all fixed-rate requiring bonds savers to put money their away for either seven five or years, according to the finance website Moneyfacts.co.uk.