By Max Clarke

As predicted, the consumer prices index (CPI) of inflation has climbed again, reaching 4.5%.

“While an increase has obviously been seen in fuel and energy prices," commented World First currency exchange chief economist, Jeremy Cook, "we are also seeing a jump in the core consumer price measure (to its highest level since 1997) which discounts these factors away.

Gas and utility bills along with sharply rising travel costs contributed to this rise, while a drop in clothing and footwear prevented further rise.

Last month a surprise drop in inflation prompted hopes that the recovery was under way. Since then, however, economists have predicted that much of the drop in retail price inflation has been due to supermarkets offering promotions, lowering the price of the ONS’s (office for national statistics) basket of goods.

Retail price inflation fell slightly, dropping to 5.2% from 5.3%.

Continued Cook: “This solidifies the Bank of England’s view in last week’s quarterly inflation report that suggested that CPI will likely hit 5% soon and leads us to believe that a rate rise in August is now more likely than ever.