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Families told to expect price rises as wages fall behind

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The rising cost of foreign holidays due to the fall in the pound is one factor as is food inflation. “We view [June’s dip] as a temporary pause in the upwards trend, rather than the beginning of a downwards glide-path for inflation,” said Alan Clarke, economist at Scotiabank, who predicts inflation of 2.8pc in July.

He expects prices will rise further over the rest of the year: “The peak in inflation is yet to be reached. Indeed, the Bank of England’s updated projection sees consumer price inflation reaching a peak of 3pc year on year in October. While our forecast is fractionally higher than the Bank’s, we appear to be in good company.”

At the same time economists do not expect to see any signs of rising wage growth in June, predicting an increase of 1.8pc in numbers out on Wednesday – meaning earnings are falling further behind prices.

However, economists expect employment to keep on rising as companies continue hiring staff. On average they anticipate an 85,000 rise in employment with the jobless rate holding steady at 4.5pc, the lowest since 1975.

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