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Labour is set to face another early financial blow as inflation is expected to rise for the first time this year.
Official figures due out on Wednesday are expected to show inflation rose above the Bank of England's 2 percent target in July.
Pantheon Macroeconomics expects the rate to rise to 2.3 percent between July 2023 and 2024, after remaining at 2 percent in the years through May and June.
Wage growth, energy bills and holiday-related price increases for airfare and hotels are among the factors behind the expected rise in inflation.
Inflation measures the increase in prices over time.
When the exchange rate is high, the value of the pound falls even further, leading to a reduction in consumers' purchasing power.
News of rising inflation would highlight the battle between the Bank of England and the new Labour government to keep prices under control.
Chancellor of the Exchequer Rachel Reeves has already issued a stark warning about the economy, highlighting a £22bn black hole in the public finances last month.
In a statement to Parliament last month, he outlined long-term plans to fix the foundations of our economy.
Welcome
Good evening and welcome to our inflation blog which will cover analysis and reaction to the figures due out on Wednesday.
Alex RossAugust 13, 2024 17:19
