Data from the Office for National Statistics (ONS) indicates that the UK’s inflation rose to 2.2% in July 2024, pushing past the benchmark 2% target of the Bank of England (BoE).
UK’s Inflation Rises For First Time This Year
The Consumer Price Index (CPI) increased for the first time since December 2023 when the central bank hiked interest rates to a 16-year high to temper inflation. In October 2022, UK inflation crested at 11.1% on the back of the pandemic.
In the 12 months leading up to July 2024, the CPI rose by 3.3%, slightly down from the 3.5% recorded in June 2024. According to information from Yahoo Finance, the annual rate of CPI services dropped to 5.2% in July 2024 from 5.7% in June 2024. This is, however, still higher than the Eurozone annual CPI rate.
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The ONS said that housing and household services mainly contributed to the rise. Inflation for food and non-alcoholic beverages stayed at 1.5%, aligning with June’s indicators. ONS chief economist Grant Fitzner commented:
Inflation ticked up a little in July as although domestic energy costs fell, they fell by less than a year ago. This was partially offset by hotel costs, which fell in July after strong growth in June. The increase in cost of goods leaving factories slowed a little in the year to July, led by falling petrol prices. Meanwhile, raw materials prices picked up for the first time in over a year, driven by smaller falls in gas and electricity costs.
Yahoo Finance cited Steve Matthews of Canada Life Asset Management, who believes that these movements should not upset the BoE’s current monetary stance as they expected “bumps in the road”.
