Responding to official inflation figures, showing that Consumer Price Index (CPI) rose to 2.5% in July, Tej Parikh, Senior Economist at the Institute of Directors, said:
“These figures show that the cost of living squeeze is not yet a thing of the past.
“The downward momentum we saw in prices earlier this year appears to be petering out, while high oil prices and hikes in utility bills have kept inflation elevated in recent months.
“For households this isn’t good news, as the already weak growth in their pay packets is being further eroded by high prices. This is likely to weigh down consumer spending, posing fresh problems for embattled high street businesses.
“As the temporary factors pushing prices up fade away, inflation is expected to slowly fall back close to the target rate, but that will offer little respite for workers without a significant pickup to their salaries in tandem.”