Inflation rises to 4.5%

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.”