KPMG comments on ONS inflation figures | KPMG | UK

KPMG comments on ONS inflation figures

KPMG comments on ONS inflation figures

Commenting on today’s ONS inflation figures, which show inflation, as measured by the Consumer Price Index (CPI) was unchanged in July at 2.6%, despite rises in electricity and air transport costs as well as in some food products

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Commenting on today’s ONS inflation figures, which show inflation, as measured by the Consumer Price Index (CPI) was unchanged in July at 2.6%, despite rises in electricity and air transport costs as well as in some food products, Yael Selfin, Chief Economist at KPMG UK, said:

“The slide in the value of the pound over the past year has put significant pressure on companies’ margins. We have seen some of these costs passed on to consumers but there’s likely to be more in the pipeline. The recent rise in the price of oil, the further weakness of the pound against the euro, along with a resilient economy – albeit growing at a slower pace – are all likely to encourage further rises to consumer prices.

“Our current projections are for inflation to peak early next year, and average around 2.6% over the next two years. This assumes a moderate slowdown in economic growth and the Bank of England taking first steps in raising interest rates next year. Wages are unlikely to keep pace with the current bout in inflation, making households poorer in real terms and leaving a cloud over overall prospects for consumer spending and economic growth this year.”

-ENDS-

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About KPMG

KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 13,500 partners and staff. The UK firm recorded a revenue of £2.07 billion in the year ended 30 September 2016. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 152 countries and has 189,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.
 

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