Inflation update - June 2008

Keeping up to date with changes in inflation is important for your business. EEF's monthly inflation update provides the latest data on the economy and the state of manufacturing.

CPI exceeded the Bank of England’s 2% target in May, rising to 3.3%. RPI also increased, to 4.3% up from 4.2%.

For both measures, the largest contribution to the annual rate between April and May came from food prices, as meat and vegetables prices rose this year but decreased last year.

A significant upward contribution also came from increases in gas, electricity and other fuels. RPI excluding mortgage payments came in at 4.4%, up from 4.0%.

Inflation came in higher than we forecasted last month and we have revised up our forecasts for both this year and next. We expect CPI to remain above target for almost a year before easing to 2.9% in June 2009. CPI is forecast to peak at 4.2% in October, when it will almost be on par with the RPI measure at 4.5%.

We anticipate some subsequent easing but CPI is expected to end the year significantly above the 2% target at 3.9%.

Get this month's inflation data

Inflation forecasts are produced on a monthly basis to provide EEF members with the most up to date information to support pay negotiations and business planning.

Get monthly and annual inflation forecasts