Image: Flickr Image: Flickr

The UK's rate of inflation rose from 0.3% to 0.5% in June, according to the Office for National Statistics (ONS).

It is the joint highest rate seen in well over a year, but still remains at historic lows.

The ONS said fuel prices, air fares and a variety of recreational and cultural goods and services were the main factors in the two percentage point increase.

As the data covers the period before the EU referendum, the ONS urged that it is too early to gauge the impact a Brexit vote has had on inflation. However, many economists believe this increase to be the start of a sustained increase in inflation following the outcome of the EU referendum.

The dramatic fall in the value of the pound since the referendum means UK businesses will have to pay more for goods and services abroad - a cost which is likely to be passed onto the consumer, resulting in higher inflation.

ONS Statistician Phil Gooding said: “The rising cost of European air flights, possibly boosted by the Euro football championships, was the biggest reason for this month’s increase in inflation."

Jeremy Cook, chief economist at World First, said: "The slightly higher than expected inflation measure has had little impact on sterling given the data is pre-Brexit. In any case, higher inflation is set to come down the track later in the year as producers and retailers respond to a falling pound and pressures on margins but we have to believe that the Bank of England will look through any spikes in inflation and costs in a bid to be growth and credit supportive, as they did during the Global Financial Crisis.”