Prices are set to rise again.
Households have been warned to brace themselves for Brexit-fuelled price hikes after firms were hit with a surge in costs.
Figures showed manufacturers suffered the biggest jump in costs for nearly three years last month.
The 4.3% year-on-year rise was blamed in part on the weak pound driving-up the cost of imported raw materials and components.
Firms are likely to pass some or all of that extra outlay on, meaning higher prices for ordinary people.
The data from the Office for National Statistics (ONS) is the first of its kind to measure the impact on firms since the June 23 referendum result to quit to EU.
Mike Prestwood, from the ONS, confirmed: “The producer prices index suggests the fall in the exchange rate is beginning to push up import prices faced by manufacturers.”
Prices rising already
The cost of imported food ingredients soared 10.2% year-on-year last month, with metals bought from abroad 12.4% more expensive.
Manufacturers saw their costs rocket 3.3% between June and July alone, the worrying ONS data confirmed.
It came amid signs that the already weakening pound, together with the bombshell vote, was already hitting households in the pocket.
Inflation rose to a 20-month high of 0.6% last month, separate ONS figures revealed.
The pick-up, from 0.5% in the 12 month to June, came as the pound’s slide fed through to food and petrol prices.
Pound crashes further
Sterling slumped in the wake of the bombshell result, boosting UK exporters but pushing-up the cost of imported goods.
The pound hit a six-and-a-half-year low against a basket of other currencies yesterday, with £1 buying just under $1.30 and around €1.15.
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said the weak pound was “entirely responsible” for last month’s pick-up in inflation.
He predicted inflation would rise to 1% by this November and 3% by the second half of next year.
TUC general secretary Frances O’Grady said: “The TUC is calling for urgent government action to ensure working people do not pay the price for Brexit.
“The government should act now to increase investment in infrastructure, build new homes, announce plans for more high-speed rail and give the go-ahead for a third runway at Heathrow.”
0 comments: