The latest figures from the Office of National Statistics (ONS) have revealed that inflation remained flat in July, at 2.6%, with experts hoping that that it has now “peaked.”
Figures also show that the Consumer Price Index remains above the Bank of England’s 2% target, considerably better than analyst’s predictions of a 2.7% rise.
However, the Retail Prove Index rose by 3.4%, resulting in an ongoing squeeze on an average household spend.
ONS figures also found that food and clothing prices were the worst effected.
Commenting on the figures, Ben Brettel, senior economist, Hargreaves Lansdown said: “It now looks quite possible inflation has peaked, and will fall back further in coming months.
“The year-on-year increase in producers’ raw material costs fell to 6.5 per cent in July – undershooting forecasts for a seven per cent rise.
“This was down from 10 per cent in June, the biggest month-to-month slowdown in almost five years.
“Input prices are a leading indicator for consumer price inflation as higher input prices are often ultimately passed on to the consumer, and therefore a lower number here could bode well for softer consumer prices down the line.
“All this is good news for the consumer, as it helps alleviate the continuing squeeze on household finances, though pay is still shrinking in real terms for now.”