Households under pressure as inflation rises

Dr Brian Sloan, Chief Economist at Greater Manchester Chamber of Commerce, said: “Households remain under pressure as inflation is proving to be more sticky than the Bank of England had anticipated, and they certainly weren’t wanting an increase. We are now seeing consumer prices inflation up 0.1% at 3.5% and above typical wage increases.

“Fuel price increases as a result of last month’s panic don’t seem to have impacted on inflation, though the hot weather appears to have taken many by surprise so demand has outstripped supply and kept prices high. There has been some positive news for producer price inflation that may work through in the coming months and the retail prices measure of inflation has fallen 0.1% to 3.6%.

“Households will possibly see further cause for concern tomorrow with the headline numbers for unemployment in the area, but we need to get the message out that whilst weak there is positive news and jobs are being created. We must look beyond the headline numbers and take confidence that jobs are being created. With inflation increasing we are unlikely to see another round of the Bank’s asset purchases in the near term as this would add to the inflationary pressure.”