The Office of National Statistics has reported that inflation for July has risen to 2.2%. This is the first rise of 2024 after inflation fell during the early part of the year and then settled at 2% for May and June.
A rise was expected because energy prices are now falling by less than they were doing a year ago.
This means that inflation has now gone back above the Bank of England’s target. However, the Bank themselves expected this, and many economic forecasters are predicting that inflation will stay above 2% for the rest of the year.
Encouragingly, inflation for services dropped from 5.7% to 5.2% in July. This was a larger drop than expected and is primarily due to a fall in inflation on restaurant and hotel pricing. It seems this may be due to the temporary effect on pricing brought about by Taylor Swift’s concerts, as well as increases to cover the minimum wage uplifts now levelling off.
The increase suggests that there is still pressure on prices and so business owners need to continue careful budgeting of costs as well as reviewing pricing to ensure profit margins.
See: https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/consumerpriceinflation/latest
Andy Burnham’s first days as Prime Minister have been marked by a flurry of announcements designed to show that his government intends to move quickly. Presenting himself as a leader focused on easing pressure on households and rebuilding trust in politics, Burnham has begun reshaping government while signalling the priorities that will define his administration.
HMRC have opened a consultation, ‘Modernising the taxation of distributions and repayments of capital from companies’. They are seeking views on proposals to modernise the tax framework dealing with distributions made by companies to shareholders who are individuals or trusts.
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