The inflation rate has risen to 2.2% in the year to July 2024, marking an increase influenced by utility costs.
- The Consumer Prices Index (CPI) saw a rise from the Bank of England’s target of 2% achieved in June 2024.
- Clothing and footwear prices increased, although sportswear prices fell, creating a mixed impact.
- Retailers express concerns over potential business rate hikes as inflation figures rise.
- The government is urged to support the retail industry by addressing 14 years of rising business rates.
The Annual Consumer Prices Index (CPI) inflation rate rose to 2.2% in the 12 months to July 2024, following the Bank of England’s target of 2% in the previous month. This increase is largely attributed to the elevated utility costs such as gas and electricity, which “fell by less than they did last year”, according to the Office for National Statistics (ONS).
Similarly, the CPI including owner occupiers’ housing costs (CPIH) saw an increase to 3.1% from 2.8% in June 2024. Within the same timeframe, clothing and footwear prices experienced a 2% increase, although this was slightly balanced by a decline in sportswear prices.
Amidst these figures, the British Retail Consortium has voiced concerns regarding the implications for the retail sector. Kris Hamer, the Director of Insight, highlighted the risk of a significant rise in business rates next year. Such rises are based on September’s inflation rates, potentially adding financial pressure to retailers currently dealing with lower inflation levels for their products compared to the headline rates.
Hamer stated: “This penalises the retail industry, as retail products currently have generally lower inflation levels than the headline figure on which business rates rises are based. The Government should buy into retail by ending the 14 years of Conservative business rates rises, which have seen the multiplier increase by a third since 2010, harming the viability of many high street stores across the country.”
The inflationary trend, driven by utility costs and impacting retail industries, underscores the need for strategic government intervention.
