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Wed, 19 Aug 2026

Wed, 19 Aug 2026 What is happening to UK prices?

UK inflation dropped slightly in June 2026, but higher energy costs are expected to push it back up.

* UK inflation rate was 2.9% in the year to July, above the Bank of England's 2% target and highest rate in four months.
* The rise in inflation was due to a 13% increase in the price cap on gas and electricity bills.
* The Bank of England is likely to hold interest rates despite rising oil prices, as the labour market shows signs of softening.
* Regular pay in the UK grew ahead of inflation in the three months to June, but unemployment rate remained unchanged at 4.9%.
* The European Central Bank raised interest rates for the first time in nearly three years in June, and is expected to do so again in September.
* US inflation was 3.4% in July, down from 3.5% in June, and the Federal Reserve held interest rates at their current level.