Markets ended last week largely unfazed by a hotter wholesale inflation print and signs of firming consumer prices, but some economists warn the underlying story is more concerning than investors seem to believe.

Annual inflation rose to an 18-month high, increasing the chance that BOE policymakers might hold off from cutting rates in the coming months.

Prices in the UK rose by 3.8% in the year to July, driven mainly by a jump in the price of airfares coinciding with the school summer holidays. That means inflation is at its highest level for 18 months and still far above the Bank of England's target of 2%. The Bank's latest forecast expects inflation to peak at 4% in September.

The chancellor will have a particular eye on food inflation because people are especially sensitive to grocery price rises. At 4.9%, it’s the highest since February 2024, driven

In July, headline consumer price inflation in the UK rose at an annual rate of 3.8 per cent, above market expectations of a 3.7 per cent rise and stronger than June’s 3.6 per cent increase. It was in line with BoE expectations.

A rise in the cost of air fares drove a bigger jump in inflation than expected, while food price inflation rose for the fourth month in a row. We use cookies to give you the best online experience. Strictly necessary cookies are on by default. Additional cookies are off by default.

UK inflation climbed for a second month in July, adding pressure on the Bank of England to reconsider its pace of interest-rate cuts.

According to Bankrate, inflation has climbed 22.7 percent since 2021, while Americans' wages have risen just 21.5 percent.