Responding to official inflation figures, showing that the Consumer Price Index (CPI) rose to 2.7% in August, Tej Parikh, Senior Economist at the Institute of Directors, said:

“Today’s figures underline that meaningful wage growth is still a distant prospect for the time being.

“While prices remain sticky, businesses are struggling to find the margins to offer inflation-beating wages amidst the cumulative burden of business rates and other regulatory costs.

“Though the rapid increases to prices we saw last year are falling out of the numbers, seasonal volatility tipped inflation up last month. Meanwhile, hikes to energy bills, elevated petrol costs, and fresh weakness in sterling are providing some wider inflationary uplift. As such, any downward momentum in price levels is likely to be gradual and slow.

“Many businesses and households will now be looking to the Autumn Budget for support, and without cost reliefs for businesses, real wage growth will remain tame.”