Core inflation remains steady at 2.6% as energy price hikes offset easing in services and food inflation.
UK annual inflation climbed to 2.9% in July, matching expectations, driven by a rise in energy prices following adjustments to the Ofgem price cap. Households face an average increase of £221 in energy bills, contributing to the uptick in headline inflation.
Core inflation held steady at 2.6%, unchanged from June, while services inflation eased slightly to 3.4% from 3.6%. Food price inflation also slowed to 1.3%, down from 1.7% in June. However, goods price inflation rebounded to 2.2%, up from 1.7%, keeping core inflation sticky.
GBP/USD showed minimal reaction, rising 0.1% to 1.3541, as markets assess the Bank of England’s next steps amid persistent inflation pressures.