The Office for National Statistics (ONS) on Tuesday released its figures for the UK Consumer Prices Index (CPI), which reveal that the consumer price inflation rate in the UK rose to 2.9% in the year to June 2013, an increase from the May 2013 rate of 2.7%.
According to the ONS data, the retail prices index (RPI), which is said to be used as the benchmark for some pay deals, also grew from 3.1% in May to 3.3% in June this year. The inflation rates are markedly higher than the average UK pay rises of 1.3%, indicating a continued decline in real wages.
Petrol and diesel prices largely contributed to the UK consumer price inflation rate, along with clothing and footwear. However air transport costs have decreased, with fares down 2.8% during June when compared to a 7.4% monthly increase in June 2012. The decrease is believed to be partly because of lower European air fares and food prices have also helped to moderate the inflation rate, with the cost of fruit and vegetables falling by 2%.
The statistics show that the inflation rate is somewhat more than the figures recorded in the previous 12 months, but have not met the levels for the period between the beginning of 2010 and April 2012. Although the rate has increased over 14 months, it has not reached the 3% that the markets expected and analysts are reportedly expecting a drop later this year as commodity prices ease. Economists are reported to have said the ONS figures for consumer price inflation means that the new Bank of England governor Mark Carney will not have to explain high inflation to Chancellor George Osborne, as the rate is well below a crucial level of 3.1%.