The Office for National Statistics has reported that the underlying rate of inflation in the UK stood at two per cent in July, up from 1.5 per cent the previous month.

Forum Response: Construction Products Association

Allan Wilen, economics director at the Construction Products Association, told ePolitix.com: "The July retail price figures confirm that UK inflationary pressures remain subdued and indicate that there is no need for an early rise in interest rates.

"Whilst up after an exceptionally weak June, at two per cent underlying inflation remains well below the Bank of England's target rate. An increase in bank base rates now would damage the prospects for UK manufacturing which remains in recession and under intense pressure from overseas suppliers."

Forum Response: Institute of Directors

Ruth Lea, head of the policy unit at the IoD, told ePolitix.com: "Although the rise in inflation is greater than expected it is still nothing to get worried about. The June figures were irrationally low so this rise is not as damaging as it might first appear. Ultimately inflationary pressures in the economy are still benign."

Forum Response: British Retail Consortium

Bill Moyes, director general of the BRC, told ePolitix.com: "The figures for July show sales slowing slightly but remaining positive, illustrating that a slowdown is far from a collapse. However, the consumer confidence remains an issue.

"People's uncertainty over their long-term financial security may need to be addressed by government action The case for the Bank of England to stimulate demand by a slight reduction in the base rate is appearing stronger."