UK inflation jumps on virus fallout, rebounding oil

LONDON (AFP) – Inflation in Britain rose to its highest level in four months in July, fuelled by rebounding oil prices and businesses passing on the costs of the coronavirus pandemic, data showed yesterday.

The annual inflation rate, as measured by the United Kingdom’s (UK) Consumer Prices Index, rose to 1.0 per cent in July from 0.6 per cent in June, the Office for National Statistics said in a statement. It is the highest level since March and comes after inflation slowed to a four-year low of 0.5 per cent in May when Britain was in coronavirus lockdown.

Volatility is expected to continue with analysts predicting a large slowdown in inflation in August after the government recently cut tax for the hospitality and tourism sectors.

The pick-up in the inflation rate in July was “due to the largest monthly (petrol) pump price increase in nearly a decade, as international oil prices rose from their lows earlier this year,” said Deputy National Statistician for Economic Statistics at the ONS Jonathan Athow.

“In addition, prices for private dental treatment, physiotherapy and haircuts have increased with the need for personal protective equipment contributing to costs for these businesses,” he said.

Clothing prices were also a factor, as they declined by less than a year earlier, the ONS said.