INFLATION has risen for the first time in eight months, largely propelled by higher transport and fuel costs, Office for National Statistics (ONS) figures showed today.

The Consumer Price Index (CPI) rose to 2.5 per cent in July, up from 2.4 per cent in June.

Annual energy price growth rose from 8.7 per cent in June to 9.3 per cent in July and is likely to keep inflation above the Bank of England’s 2 per cent target for the rest of the year.

Transport prices were 5.7 per cent higher last month than in July last year.

ONS head of inflation Mike Hardie said: “Transport tickets and fuel, along with often erratic computer game prices, drove up costs for consumers.”

The Retail Prices Index (RPI) fell to 3.2 per cent, down from 3.4 per cent in June, and lower than the 3.5 per cent economists had expected.

Shadow chancellor John McDonnell said: “The latest ONS figures show the disastrous impact of nearly a decade of austerity on the living standards of families.”

He called them “a stark example of how brutal Tory pay restraint and austerity has led to living costs outstripping earnings for families.”

The RPI figure was used by the Department for Transport yesterday to impose a 3.2 per cent rise in rail fares on top of a 3.6 per cent increase from last year.

Transport Secretary Chris Grayling drew further fury from unions after writing to general secretaries on Tuesday stating that he wants to “see lower levels of increase for passengers in future” by linking fares to the lower CPI – but suggested that this could only happen if wage rises were also linked to CPI.

The RMT union accused Mr Grayling of trying to cap pay rises and blame workers for high fares.