Inflation rises to 4.5%
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The rate of Consumer Prices Index inflation rose to 4.5% in August, up from 4.4% in July, according to figures from the Office for National Statistics.
The Retail Prices Index also increased to 5.2% from 5%.
The main upward pressures to annual inflation came from clothing, fuels and lubricants, furniture and household goods and domestic heating.
The main downward pressure to annual inflation came from transport services, particularly passenger transport by air, sea and rail. There was also a downward pressure from recreation and culture, particularly from games, toys and hobbies and, to a lesser extent, recording media and data processing equipment.
Jonathan Samuels, CEO of Dragonfly Property Finance, says: “Inflation edges up again but such is the fragility of the economy that an interest rate rise to contain prices just isn’t on the cards.
“Inflation would have to rise far more sharply before the MPC would even consider raising Bank Rate.
“The containment of inflation simply isn’t the main priority of the MPC right now. Its priority is to get the economy moving again, despite the fact inflation is more than double its target.”
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Readers' comments (4)
Mark Davies | 13 Sep 2011 10:45 am
One of the remits of the MPC is to control inflation. They have clearly failed !
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Anonymous | 13 Sep 2011 12:19 pm
Mark, would you count it as a success if they increased rates by 1% - 1.5% in order to bring down the inflation rate? would this stop people having to spend their money on heating, petrol and food (which is higher due to transportation costs).
ps do you count yourself as a failure if you don't achieve all of your targets?
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Anonymous | 13 Sep 2011 3:38 pm
Can someone please explain what lubricants they are referring to exactly??
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chris gardner | 13 Sep 2011 4:00 pm
@Anonymous | 13 Sep 2011 12:19 pm
nonsense.Its the fools paradise created by artificially low rates that is keeping the economy from moving forward.In the usual course of events those who have bad luck and end up skint lose their houses and property, which are then bought up by others and turned for a profit. Its called capitalism. The problem is now, there are thousands of people hanging on the edge who will go under when rates rise, and their misfortune will be somebody elses good fortune, and the cycle starts over. All of a sudden the wheels are moving again and we all get more prosperous.Like it or not thats the game we all play everyday. Problem is today though, its like musical chairs when the music stops. What can we do? turn on the music....ie put up interest rates now.
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