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UK inflation hits highest for almost a year and a half UK inflation hits highest for almost a year and a half
(32 minutes later)
Prices rose by 3.6% in the year to June, the steepest rise in inflation since January 2024, the Office for National Statistics (ONS) said. Prices rose by more than expected to 3.6% in the year to June, the steepest rise in inflation since January 2024, the Office for National Statistics (ONS) said.
That marks a significant rise from the 3.4% rate in May. That marks a rise from the 3.4% rate in May, boosted by higher food prices and a lower drop in fuel prices than this time last year.
The rate at which prices rise matters to shoppers, whose money doesn't go as far if goods and services are becoming rapidly more expensive. The rate at which prices increase matters to shoppers, whose money doesn't go as far if goods and services are becoming rapidly more expensive.
The decision will affect whether the Bank of England decides to raise or lower interest rates as higher rates can slow inflation by dampening economic activity. Inflation remains much higher than the Bank of England's target rate of 2%, but a cut in the cost of borrowing is still expected at next month's rate-setting meeting.
The pace of price rises affects whether the Bank decides to raise or lower interest rates as higher rates can slow inflation by dampening economic activity.
The faster pace of price rises for June was unexpected, with economists having predicted the inflation rate would stay at 3.4%.
"Inflation ticked up in June, driven mainly by motor fuel prices which fell only slightly, compared with a much larger decrease at this time last year," said Richard Heys, acting chief economist for the ONS, the UK's official statistics authority."Inflation ticked up in June, driven mainly by motor fuel prices which fell only slightly, compared with a much larger decrease at this time last year," said Richard Heys, acting chief economist for the ONS, the UK's official statistics authority.
"Food price inflation has increased for the third consecutive month to its highest annual rate since February of last year," he said, although it remains well below the peaks seen two years ago."Food price inflation has increased for the third consecutive month to its highest annual rate since February of last year," he said, although it remains well below the peaks seen two years ago.
Inflation remains much higher than the Bank of England's target rate of 2%, but a rate cut is still expected at next month's rate setting meeting. Average wages have also risen over the past year, by 5.2%, suggesting many people will not be worse off.
Average wages have risen over the past year by 5.2% suggesting many people will not be worse off.
However, shoppers are more affected by rising prices daily staples such as food and petrol.However, shoppers are more affected by rising prices daily staples such as food and petrol.
Food prices rose at a rate of 4.5% - the highest rate since February 2024.Food prices rose at a rate of 4.5% - the highest rate since February 2024.
Chancellor Rachel Reeves said she knows people are "still struggling with the cost of living" but said the government's plans included putting "more money into people's pockets". Chancellor Rachel Reeves said she knew people were "still struggling with the cost of living" but said the government's plans included putting "more money into people's pockets".