British consumer price inflation eased slightly in July, helped by lower airfares and clothing costs, but there were further signs of price pressures building in the property market, with house prices rising rapidly. Joanna Partridge reports.
Rail passengers who say they can't afford higher fares. Commuters protest outside a London station over next year's planned rise in prices. They'll go up by 4.1% on average - with some ticket prices rising by as much as 9%. The increase outstrips inflation, which fell slightly in July from 2.9% to 2.8%. SOUNDBITE: Andy Warnock-Smith, RMT trade union, saying (English): "The fares are the highest in Europe and one of the worst services for rail commuters in Europe." Consumer price inflation eased slightly last month, helped by lower cost of clothing and airfares. It's a different story for housing prices - which don't feed directly into the CPI inflation measure - and are rising rapidly. The Royal Institution of Chartered Surveyors' monthly property price survey pointed to the biggest increase since 2006. Government data shows prices rose faster than inflation, by 3.1%. Prices are not just climbing in London, but also in other parts of Britain. The Bank of England aims to keep inflation at 2% - but last week it said it would keep rates at a record low until unemployment hits 7%. The central bank's new boss Mark Carney has played down concerns about rising house prices. But they could potentially force the central bank to raise rates earlier than planned, if they seem to be getting out on control. Inflation looks set to remain a challenge for Carney says Edward Hadas from Reuters Breaking Views. SOUNDBITE: Edward Hadas, Economics Editor, Reuters Breaking Views, saying (English): "He sees the UK economy as very weak and he sees inflation as basically under control. That just seems really not to go with the evidence, if you look at the annual inflation rate over the last two full years, three years, you're talking about 3.2% rate, it's well over the target 2% House prices are steadily rising, the rate of increase is rising." The British government's Help to Buy stimulus package was designed to boost the property market and encourage developers to build more homes. It says it's helped people buy 10,000 new homes since it was launched in April. But critics warn it risks creating a bubble in property prices - something the British economy wants to avoid on the path to recovery.