UK inflation unexpectedly rose to the highest level in six months in August, pushed up by the rising cost of theatre tickets and high street shops launching their new-season autumn clothing ranges.
The Office for National Statistics said the consumer price index (CPI) jumped to 2.7% last month from 2.5% in July, confounding economists’ forecasts for the rate to fall to 2.4%.
The surprise increase will prove unwelcome for hard-pressed British households, which had finally begun to see wages rising above inflation earlier this year, following a protracted squeeze on living standards triggered by the Brexit vote. Workers’ pay rises are gradually increasing, although they remain perilously close to inflation.
The latest labour market figures showed total pay including bonuses rose by 2.9% in the three months to July. Regular pay growth was 2.6%, suggesting real wages could be falling for many workers in Britain.
Mike Jakeman, senior economist at PwC, said: “A faster rate of inflation is likely to reduce the narrow gap between wages and inflation further, meaning that the rise in living standards for workers is likely to have been only marginal.”
The ONS said the biggest contribution to the increased cost of living came from the rising price of recreation and culture, driven by higher ticket prices at the theatre and from the cost of new toys and computer games. Clothing launched by high street shops for the autumn season also had an impact, with the average price of clothing and footwear increasing by 3.1%.
Although petrol prices continued to climb, rising by 1.4% between July and August, the rise was lower than a 1.8% increase experienced over the same period a year ago, providing a small downward contribution to the inflation rate.
Some economist said the latest uptick for inflation could be temporary. Inflation has steadily declined this year as the impact from the post-EU referendum fall in sterling begins to fade.