Inflation in the United Kingdom is up to a twenty month high. Despite the obvious link to the Brexit vote there are other factors that are also in play leading to this rise in inflation.
Food prices are particularly up (10% during the year), but so are fuel prices (0.6% in July alone), and other consumer products. Fuels, alcholic beverages, and hotels all were big increases, while social housing rent and games all decreased.
The Brexit vote led to a sharp decline in the value of the British pound. Many economists have long been predicting economic problems for the United Kingdom as a result of the referendum vote to leave the European Union. Not only are there real economic costs with this exit, but also extensive unknowns in the vote as a result of the Brexit that are leading to economic dislocations.
Still the Brexit related inflation has lead to higher prices for consumers and the economic impact that this will have is currently unknown, though consumers are unlikely to have much disposable income as a result of these rising prices. Further, companies may try to control their costs by not allowing for raises for workers with some resulting impact.
The inflation data was actually better than expectations and has provided some bounce back in the pound as a result with the rate bouncing back to $1.30. The Bank of England is expected to provide more stimulus to the nation as a result of the Brexit but there is uncertainty to the exact amount and extent of this stimulus. The UK government is currently targeting an inflation rate of 2% per year and any movement from this is likely to impact their stimulus plans.