July’s UK CPI data may exceed the Bank of England’s 2.8% forecast, fueling bets on a September rate hike amid persistent price pressures.
UK inflation is expected to climb to 2.9% year-over-year in July, up from 2.5% in June, marking the highest level in four months. The rise is driven by higher energy bills and sticky service inflation, which economists forecast at 3.4% YoY.
Core CPI, excluding volatile items, is projected to ease slightly to 2.5%. The monthly CPI is seen rising 0.3%, accelerating from June’s 0.1% gain. The Bank of England had forecast July inflation at 2.8%, below the expected print.
Analysts warn that food prices and other components may pose upside risks to the UK’s disinflation trend, complicating the BoE’s policy outlook. Markets are closely watching for signs of sustained inflationary pressures ahead of the September rate decision.