CPI consumer price index inflation hits 4.4%
UK inflation based on the consumer price index (CPI) has jumped to an annual rate of 4.4 per cent in July compared to 4.2 per cent in June.
The results make July the 20th month that CPI inflation has been above the Bank of England's two per cent rate, which may lead to overseas money transfers as businesses look to make their purchases abroad.
Economists will be disappointed with the results, having previously reached a consensus estimate of 4.3 per cent.
Finance group Schroders, which predicted a CPI inflation of 4.5 per cent, said that excluding energy, food, and alcoholic beverages, core prices inflation rose from the annual rate of 2.8 per cent to 3.1 per cent.
A major factor in the increased inflation rate was the cost of transport as well as the greater price of oil.
Commuters recently learnt that rail fares are set to rise by as much as 13 per cent from January.
Furthermore, economists are keeping an eye on next month's CPI inflation results which factor in the first set of gas and electricity price hikes.
"Overall, this month's numbers are not as important as next month's numbers," explained Schroders.
"We expect the rise in energy prices to push up CPI inflation to close to five per cent for August, and beyond that later in the year."
The group says that the Bank of England is likely to continue to disregard the rise in inflation and keep interest rates on hold until 2013, believing that the weakness in the economy will bring down inflation.