CPI hits nine-year high:

The annual rate of consumer price inflation (CPI) jumped to a nine-year high of 3.2% in August from 2% the previous month – the biggest monthly increase since CPI records began in 1997. Core CPI, a gauge of underlying inflation that excludes volatile food and energy prices, rose to 3.1% from July’s 1.8%. A fall in prices in August 2020 owing to the Eat Out to

Help Out scheme meant inflation rose from a low base, but there seems to be plenty of upward price pressure in the pipeline. As far as producers’ prices are concerned, both the costs of the materials and fuels they purchase (input prices) and what they are charging at the factory gate (output prices) are climbing at their fastest rate in a decade. The state of the labour market also presages eventual inflation via higher wages. Employment has returned to its pre-pandemic level and vacancies in the three months to August exceeded one million for the first time since the data series’ inception in 2001. This points to higher wage growth, a key driver of rising prices. (See pages

3 and 22.)