RISING prices of clothing and fuel have been blamed for inflation rebounding last month, tightening the squeeze on cash-strapped households grappling with low or no wage growth.

Figures from the Office for National Statistics (ONS) shows the Consumer Price Index (CPI) measure of inflation was 2.9 per cent in August – surpassing economists’ expectations of 2.8 per cent.

It brought an end to a momentary pause in June and July at 2.6 per cent, and matches levels seen in May this year and June 2013.

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CPI was last higher in April 2012 when the rate reached three per cent.

The figures prompted a call from Scottish business leaders for the Bank of England to put off any decision on raising interest rates.

Liz Cameron, chief executive of Scottish Chambers of Commerce, said: “We are hearing early signs from members, although not widespread, of increasing costs being passed down the supply chain and potentially to the end consumer.

“With this in mind, and with only modest GDP growth, the Bank of England should hold steady on raising interest rates.”

Mike Prestwood, ONS head of inflation, said: “Clothing prices rising faster than last year, along with a hike in the cost of petrol, helped nudge inflation upwards.”

Clothing and footwear prices rose to their highest level since official records began, up 4.6 per cent in August.

On a monthly basis they rose 2.4 per cent after one per cent hike between July and August last year – partly driven by rising import costs for retailers linked to sterling’s slump following the Brexit vote.

Motor fuels were also pushing the overall cost of living higher, with fuels and lubricants rising 1.6 per cent month-on-month in August following a 1.3 per cent fall last year.

Petrol rose by 1.8p a litre to 115.7p in August, while diesel picked up by 2p to 117.6p.

Howard Archer, chief economic adviser to the EY ITEM Club, said: “The recent slippage in sterling has increased the likelihood that inflation will hit just above three per cent in the latter months of 2017.”