Fact Service August 2020

Issue 33

Inflation rises to 1%

Inflation has increased faster than expected according to the latest figures from the Office for National Statistics (ONS), which show that Consumer Price Inflation (CPI) rose to 1.0% in July, up from 0.6% in June. CPI was pushed up by clothing, transport costs and household items, as petrol prices rose and shops were unable to hold the summer sales that usually reduce clothing costs.

This month's figures are used to calculate rail fare increases, using a separate measure, the Retail Prices Index (RPI, although the ONS considers that this no longer meets the requirements of a national statistic). Rail fares will therefore increase by the RPI inflation rate of 1.6%.

The CPIH – the consumer prices index rate which includes owner occupiers’ housing costs – 12-month inflation rate was 1.1% in July 2020, up from 0.8% in June 2020.

Across the European Union inflation rose to 0.9% in July, from 0.8% in June, according to figures from Eurostat, and from 0.3% to 0.4% in the Euro area.