The signs were there for all to see — pubs, restaurants, hairdressers and so on all pushing up their prices. Businesses have to make a profit while observing social distancing, dealing with soaring fuel prices and fast-accelerating wages. Yet the latest inflation figures seem to have caught many people by surprise. The Consumer Prices Index (CPI) is back above the Bank of England’s target at 2.1 per cent.
Fears that Brexit would lead to a surge in food prices appear to be unfounded
Drill down into the figures and you can see that, while the current level of CPI is not in itself a problem, inflationary pressures are building. Producer price inflation — prices of goods and services bought and sold by businesses rather than consumers — is at a far higher rate. Output prices are now rising at 4.6 per cent, up from 4 per cent in April. Input prices, which covers fuel, raw materials and other business costs, are rising at 10.7
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