UK inflation rate rose to 2.2% in July, marking the first increase in 2024 and surpassing the Bank of England’s (BOE) target of 2%.
Gatekeepers News reports that the Office for National Statistics (ONS) attributed the rise to gas and electricity prices falling by less than they did last year.
Grant Fitzner, chief economist at the ONS, explained: “Inflation saw a slight increase in July because, while domestic energy costs did decrease, the drop was smaller compared to the same time last year… This was partially offset by hotel costs, which fell in July after strong growth in June.”
The latest figures indicate prices are rising faster across the UK than in previous months, but still at a slower pace than in 2022 and 2023. Food price inflation has settled down to 1.5%, while services inflation stands at 5.2%, down from 5.7% in June.
The BOE is expected to consider July’s inflation increase when voting on interest rates in September. Last month, the BOE reduced rates to 5% from 5.25%, marking the first cut since the pandemic began, with experts predicting additional cuts later this year.
