Wed, 16 Jul 2025

Wed, 16 Jul 2025 UK inflation at highest for almost a year and a half

Food and clothing prices rose more quickly while fuel fell only slightly, boosting the overall rate of inflation.

* Inflation rose to 3.6% in the year to June, the highest since January 2024.
* The main contributors to higher inflation were: + Transport: transport costs increased due to higher airfares and rail fares, although fuel prices fell slightly. + Food: food prices rose by 4.5%, with manufacturers facing higher costs for ingredients and energy.
* Average wages have risen by 5.2% over the past year, suggesting many people will not be worse off overall, but low-income shoppers are more affected by price rises.
* Private rents increased by 6.7% in the year to May, while house prices rose by 3.9%.
* Food industry representatives blame higher costs for key ingredients and energy as well as labour costs for the rise in food prices.
* Chancellor Rachel Reeves said she knew people were "still struggling with the cost of living" but emphasized the importance of growth to putting the UK back on track.
* The Bank of England is expected to cut borrowing costs at next month's rate-setting meeting, which could lead to lower interest rates for savers.
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