Airfares Drive Inflation Surge Amid Rising Food Prices
The Office for National Statistics (ONS) has reported that airfares significantly contributed to the recent rise in prices, indicating that consumer demand for vacations remains strong, reports 24brussels. Food prices, which are often politically sensitive, experienced a month-on-month increase of 0.4 percent and rose by 4.9 percent year-on-year.
Food prices, like energy costs, are subject to volatility; however, the core Consumer Price Index (CPI) also showed an upward trend, climbing 0.2 percent from the previous month and 3.8 percent from a year earlier, surpassing expectations. This increase was mainly driven by an acceleration in service inflation, which jumped to 5.0 percent from 4.7 percent recorded in June.
“With core inflation heading higher, beating market expectations, this brings further into question the Bank of England’s ability to ease interest rates in the near term,” stated Marcus Jennings, a bond strategist at Schroders, in comments provided via email.