As Fraser has already observed, annual CPI inflation rose to 4.4 per cent in July, from 4.2 per cent in June. This means that
it has been 4 per cent or more throughout 2011 and expectations are for it to reach 5 per cent before the year is out.
Even stripping out tax increases (such as the VAT rise in January), prices have risen by 2.8 per cent in the past year. But looking at the more detailed figures reveals even more dramatic price rises.
The biggest driver of inflation is rising transport costs, which account for 1.25 of that 4.4 per cent figure. “Fuels and lubricants” are 15.1 per cent more expensive than they were a year ago, air travel 12.5 and rail travel 9.3. In fact, rail travel costs have been rising rapidly for several years now, so for a trip that would’ve cost you £100 five years ago, you now have to spend (on average) £137.
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