UK inflation rose by more than expected in July as demand for summer travel pushed up air fares and food prices continued to climb, according to official figures.<\/p>\n
Consumer Prices Index (CPI) inflation increased to 3.8% in July, from 3.6% in June, the Office for National Statistics (ONS) said.<\/p>\n
Most economists had been forecasting inflation to rise to 3.7%.<\/p>\n
It means the headline rate remained at the highest level since January 2024, when it hit 4%.<\/p>\n
The ONS said transport was the biggest factor driving up overall inflation last month, particularly due to a spike in flight prices as families booked trips during the school summer holidays.<\/p>\n
Air fares soared by 30.2% between June and July, the biggest jump since the collection of monthly data began in 2001.<\/p>\n
The average price of petrol rose by 2p per litre between June and July, and the average diesel price by 2.9p per litre over the period, the data showed.<\/p>\n
Prices across UK restaurants and hotels also increased last month, largely driven by a jump in overnight hotel stays booked the night before.<\/p>\n
Food and drink inflation rose to 4.9% in July, from 4.5% in June.<\/p>\n
This marked the fourth month in a row that the annual rate had increased and remained at the highest level since February 2024.<\/p>\n
Grant Fitzner, the ONS\u2019s chief economist, said: \u201cThe main driver was a hefty increase in air fares, the largest July rise since collection of air fares changed from quarterly to monthly in 2001.<\/p>\n
\u201cThis increase was likely due to the timing of this year\u2019s school holidays.<\/p>\n
\u201cThe price of petrol and diesel also increased this month, compared with a drop this time last year.<\/p>\n
\u201cFood price inflation continues to climb \u2013 with items such as coffee, fresh orange juice, meat and chocolate seeing the biggest rises.\u201d<\/p>\n
Chancellor Rachel Reeves acknowledged that there was \u201cmore to do to ease the cost of living\u201d following the figures.<\/p>\n
She said: \u201cWe have taken the decisions needed to stabilise the public finances, and we\u2019re a long way from the double-digit inflation we saw under the previous government, but there\u2019s more to do to ease the cost of living.<\/p>\n
\u201cThat\u2019s why we\u2019ve raised the minimum wage, extended the \u00a33 bus fare cap, expanded free school meals to over half a million more children and are rolling out free breakfast clubs for every child in the country.\u201d<\/p>\n
Story Continues <\/p>\n
Kris Hamer, director of insight for trade body the British Retail Consortium, said: \u201cHouseholds are once again seeing the cost of their weekly shop climb, with food inflation now up by 1.9 percentage points in just four months.<\/p>\n
\u201cThis surge has been a key driver behind headline inflation, alongside a rise\u00a0in transport costs, piling fresh pressure on families already being forced to cut back.<\/p>\n
\u201cThe Bank of England has been clear that Government policies, which have driven up the costs of employment, are fuelling price rises at the till, while poor harvests and global instability have also added further cost pressures.\u201d<\/p>\n
He added that there was some \u201climited relief\u201d for consumers with clothing and footwear inflation easing and some everyday food items like olive oil, butter and cheese falling month-on-month.<\/p>\n
The Bank of England is expecting CPI inflation to continue rising to a peak of 4% in September, before price rises start to ease.<\/p>\n
The central bank is tasked with keeping inflation at 2%.<\/p>\n
Elliott Jordan-Doak, senior UK economist for Pantheon Macroeconomics, suggested the Bank\u2019s policymakers could be concerned by rising inflation in the UK services sector, but that it was \u201cpartly driven by a sharp move in the erratic airfares component, which could unwind in August\u2019s data\u201d.<\/p>\n
The annual rate of services CPI inflation rose to 5% in July from 4.7% in June.<\/p>\n
\u201cThe big picture remains that inflation is set to stay miles above target for the foreseeable future,\u201d he said.<\/p>\n
The economist is forecasting that CPI will remain above 3% until April 2026, meaning the Bank could keep interest rates on hold for the rest of the year.<\/p>\n
Elsewhere, the data showed the ONS\u2019s preferred measure of inflation, Consumer Prices Index including owner occupiers\u2019 housing (CPIH), rose to 4.2% in July from 4.1% in June.<\/p>\n
The Retail Prices Index (RPI) rate of inflation rose to 4.8% last month from 4.4% in June.<\/p>\n
This figure could be used to calculate how much regulated train fares in England will rise by next year.<\/p>\n","protected":false},"excerpt":{"rendered":"UK inflation rose by more than expected in July as demand for summer travel pushed up air fares…\n","protected":false},"author":2,"featured_media":358873,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3,4],"tags":[126269,748,115437,393,21509,21508,4884,111776,1144,15165,126270,712,16,15,1764],"class_list":{"0":"post-358872","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-uk","8":"category-united-kingdom","9":"tag-air-fares","10":"tag-britain","11":"tag-consumer-prices-index","12":"tag-england","13":"tag-food-inflation","14":"tag-food-prices","15":"tag-great-britain","16":"tag-headline-inflation","17":"tag-northern-ireland","18":"tag-office-for-national-statistics","19":"tag-school-summer-holidays","20":"tag-scotland","21":"tag-uk","22":"tag-united-kingdom","23":"tag-wales"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/115059964218724686","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/358872","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=358872"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/358872\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/358873"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=358872"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=358872"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=358872"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}