Inflation rose by 2.6 per cent in July, according to official inflation figures from the Office for National Statistics (ONS).
Although CPI inflation has fallen sharply from highs of over 5 per cent last autumn, the 2.6 per cent increase means that families need to find an extra £897 to pay for the same goods and services that they bought a year ago, according to MGM Advantage, the pensions company.
Across all the homes in the UK, this equates to £23.6 billion, the company said.
July’s inflation figure took economists by surprise as it showed an increase on the 2.4 per cent rise in the cost of living recorded in June. Experts had expected inflation to continue to moderate towards the Bank of England’s target of 2 per cent.
However they said that they still expect inflation to fall over the coming months. July’s figure was boosted by a sharp rise in the cost of air travel due to increased taxes.