Wed, 20 Aug 2025

Wed, 20 Aug 2025 Air fares and food prices push up inflation to 3.8% in July

Prices are now rising slightly quicker than expected and at their fastest pace since January 2024.

* This marks the highest level of inflation since January 2024 and is above the Bank of England's target of 2%.
* Food price rises were led by beef, chocolate and confectionery, instant coffee, and fresh orange juice.
* Air fare prices rose by 30.2% between June and July, the largest increase for this period since 2001.
* The timing of school holidays is likely to have contributed to the air fare increases.
* Petrol and diesel prices also increased compared to last year.
* Food and non-alcoholic beverages prices rose 4.9% in the year to July, the highest since February 2024.
* Another measure of inflation, the Retail Prices Index (RPI), rose to 4.8% in the year to July.
* Economists expect the Bank of England to slow down interest rate cuts due to the higher-than-expected increase in inflation.
* The Bank's latest forecast expects inflation to peak at 4% in September.
* Chancellor Rachel Reeves said the government has taken steps to stabilise public finances, but more needs to be done to ease the cost of living.
* Shadow chancellor Mel Stride accused the government of pushing up costs and stoking inflation through tax policies.
* Liberal Democrat treasury spokesperson Daisy Cooper called for bolder action from the government to tackle the cost-of-living crisis.
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