What does it mean for consumers? Inflation has climbed to a figure of 2.9%, spelling yet more bad news for cash-strapped consumers and leaving many questioning when the pressure on our finances will ever ease.
Although economists predicted that inflation would rise to a higher figure of 3%, what is clear is that Consumer Price Index (CPI) inflation is on an upward trend (up from 2.7% in May) as is Retail Price Index (RPI) inflation (up by 0.2% to 3.3% in June).
While a fall in the price of air fares, bread, fruit, vegetables and package holidays helped to prevent inflation climbing even further, CPI inflation is still at its highest recorded level since April 2012.
Although inflation is still well below the peak of 5.2% recorded in 2011, consumers are still facing increased costs for personal care items such as moisturiser and deodorant and domestic heating fuel.
However, it’s not all doom and gloom as some items have defied analysts’ forecasts and dipped in price, rather than increased, providing some relief for hard pressed consumers. These include bread, cereals and dairy products, potatoes and fruit.
While inflation has risen it seems that we can still get in our weekly shop and go on our annual holidays without paying over the odds.
But despite this glimmer of hope, the fact that the rise in inflation continues to outstrip an increase in our pay packets (with wages rising by just 1.3% in the three months to April) means that consumers are set to be playing a game of catch up when it comes to balancing their income with their expenditure.
Yet not all is lost, as the Treasury has said that the government has implemented measures that will help consumers balance the books, despite a backdrop of rising inflation.