July’s inflation increase marks the first uptick in price growth following the energy price cap adjustment, signaling potential sustained pressure.
UK consumer price inflation climbed to 2.9% in the 12 months to July, up from 2.6% in June, driven by the reset of the energy price cap. The rise suggests a shift toward prolonged inflationary pressures after months of easing price growth.
Services inflation, a key indicator for the Bank of England due to its link to wage pressures, slowed to 3.4%. Core inflation, excluding food and energy, also moderated but remained elevated, reinforcing concerns over persistent price trends.
The data reinforces expectations that the BoE may maintain a restrictive monetary policy stance to curb inflationary risks in the coming months.