CPI increases, squeezing wages further

Inflation up, real wages down.

Inflation in the UK has come in slightly below expectations, with the headline CPI increasing by 2.9 per cent in the 12 months to June 2012. The consensus forecast predicted it would come in at 3.0 per cent. The final count is below the level at which Mark Carney, the new Governor of the Bank of England, would be required to write to George Osborne, which will be a relief in Threadneedle Street, even if it's cutting it a bit fine. But it's also well up from last month's count of 2.7 per cent.

The main drivers increases of the increase were clothing and fuel costs, particularly motor fuels, while the falling costs of air travel added the biggest downward pressure.

The release also saw the introduction of CPIH, a new measure of inflation which includes the housing costs of owner-occupiers. That grew by 2.7 per cent in the last year, and the difference is due "principally to owner occupiers’ housing costs increasing more slowly than overall inflation for other consumer goods and services". That fits with the surprise finding last month that private sector rents aren't rising as fast as we think. The correlation is to be expected, since the rental dataset is only made possible thanks to the information gathered for CPIH.

Hovering in the background of every inflation release these days is the knowledge that real wages are being crushed, and that's no different now. In April, the latest month for which figures are available, wages grew by just 1.3 per cent. In real terms, that's a 1.6 per cent cut. The squeeze continues.

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

Ukip's Nigel Farage and Paul Nuttall. Photo: Getty
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Is the general election 2017 the end of Ukip?

Ukip led the way to Brexit, but now the party is on less than 10 per cent in the polls. 

Ukip could be finished. Ukip has only ever had two MPs, but it held an outside influence on politics: without it, we’d probably never have had the EU referendum. But Brexit has turned Ukip into a single-issue party without an issue. Ukip’s sole remaining MP, Douglas Carswell, left the party in March 2017, and told Sky News’ Adam Boulton that there was “no point” to the party anymore. 

Not everyone in Ukip has given up, though: Nigel Farage told Peston on Sunday that Ukip “will survive”, and current leader Paul Nuttall will be contesting a seat this year. But Ukip is standing in fewer constituencies than last time thanks to a shortage of both money and people. Who benefits if Ukip is finished? It’s likely to be the Tories. 

Is Ukip finished? 

What are Ukip's poll ratings?

Ukip’s poll ratings peaked in June 2016 at 16 per cent. Since the leave campaign’s success, that has steadily declined so that Ukip is going into the 2017 general election on 4 per cent, according to the latest polls. If the polls can be trusted, that’s a serious collapse.

Can Ukip get anymore MPs?

In the 2015 general election Ukip contested nearly every seat and got 13 per cent of the vote, making it the third biggest party (although is only returned one MP). Now Ukip is reportedly struggling to find candidates and could stand in as few as 100 seats. Ukip leader Paul Nuttall will stand in Boston and Skegness, but both ex-leader Nigel Farage and donor Arron Banks have ruled themselves out of running this time.

How many members does Ukip have?

Ukip’s membership declined from 45,994 at the 2015 general election to 39,000 in 2016. That’s a worrying sign for any political party, which relies on grassroots memberships to put in the campaigning legwork.

What does Ukip's decline mean for Labour and the Conservatives? 

The rise of Ukip took votes from both the Conservatives and Labour, with a nationalist message that appealed to disaffected voters from both right and left. But the decline of Ukip only seems to be helping the Conservatives. Stephen Bush has written about how in Wales voting Ukip seems to have been a gateway drug for traditional Labour voters who are now backing the mainstream right; so the voters Ukip took from the Conservatives are reverting to the Conservatives, and the ones they took from Labour are transferring to the Conservatives too.

Ukip might be finished as an electoral force, but its influence on the rest of British politics will be felt for many years yet. 

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