The Office for National Statistics yesterday reported that UK inflation, as measured by the Consumer Price Index (CPI) rose in July to 0.1% from the 0% registered in June. This remains significantly below the Bank of England’s target of 2%. Members of the rate setting committee expect this figure to remain low over the short term due to the impact of lower oil and food prices, the latter posting its 13th consecutive month of falls as supermarket price wars show no signs of abating.

There was a larger than expected increase in core CPI however which excludes the more volatile food and energy costs. This rose to 1.2% from 0.8%. Increases in wage inflation, particularly in the private sector, could potentially feed through into this figure moving forward.

There was good news for all those who are frequent rail users, with the retail price index (RPI) posting an annual increase of 1%. This should mean that rail prices next year, which are set using this index, should rise by no more than this.