UK inflation tipped to rise again with wages forecast to stagnate

Latest inflation figures due out this week forecast to show prices rising at 2.7% with pay remainin flat even as unemployment continues to fall

The squeeze on cash-strapped British households is expected to be illustrated this week byofficial figures likely to show that inflation picked up last month, outstripping growth in pay packets.

City economists are forecasting that the consumer price index (CPI) rose at an annual rate of 2.7% in July, up from 2.6% in June. The figures will be released by the Office for National Statistics (ONS) on Tuesday, followed by labour market data the next day which are expected to show wage growth stagnated while unemployment continued to fall.

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