UK inflation in July 2025:

The annual inflation rate in the United Kingdom was 3.8 % of expected in July, according to data issued by the National Statistical Office (ONS) on Wednesday.

Economists included in Reuters expected that inflation would reach 3.7 % in the twelve months to July, after picked up to 3.6 % in June, exceeding expectations.

The basic inflation increased in July, which excludes the prices of powerful energy, food, alcohol and tobacco, by 3.8 % annually, an increase of 3.7 % in the twelve months to June.

Grant Vitzner, chief economist in On S, on Wednesday that the rise in inflation pushed the consumer price index to its highest annual rate since the beginning of last year.

“The main driver was a significant increase in air prices, the largest rise in July since a group of air prices changed from quarterly to month in 2001. This increase most likely increased to the timing of school holidays for this year,” he indicated in a post on the X.

He added: “The price of gasoline and diesel increased this month, compared to the decrease in this time last year. Food prices continue to climb, with things such as coffee, fresh orange juice, meat and chocolate that are witnessing the largest rise.”

UK Chancellor Rachel Reeves reported on Wednesday that there was more to reduce the cost of living.

She said in the comments via e -mail: “We have taken the necessary decisions to achieve stability in public financial affairs, and we are far from inflation consisting of two numbers we saw under the previous government, but there is more to do it.”

The British pound was largely fixed against the dollar after the data was issued, as it was circulated at $ 1.3489.

The inflation of services gained to 5 % in July from 4.7 % in the previous month. Analysts say that the publication is another obstacle in the attempts of the Bank of England to tame inflation, as companies that focus on service raise prices to cover the costs of increasing wages and the last rise to national insurance contributions.

The higher reading in July also reduces the opportunity of any additional interest rate by the Bank of England this year.

“I am annoyed by inflation of services, it seems sticky, and given the importance of services in the British economy, I look at this and think, if MPC (the Central Bank’s Monetary Policy Committee) is also looking at this – and I am sure it is – the opportunity to reduce rate rates in November,”

The latest data comes yet The Bank of England voted earlier this month with a fine margin to reduce interest rates from 4.25 % to 4 %When the central bank resumed what it describes as a “gradual and accurate” approach to cash dilution.

While BOE was widely expected to cut prices by 25 basis points at the time, traders and economists were keen to see the collapse of support for this step. In the end, policy makers had to vote twice on the decision to reduce prices, and the majority of 5-4 chose a reduction.

The members of the Politics Committee of the Bank of England were forced to evaluate sticky inflation With a cooling job market Fading, but a little growth. Last week, GDP data showed a sudden expansion of 0.3 % in the second quarter.

England Bank is closely seen by inflation data, After prediction, the consumer price index can reach its peak by 4 % in September Before retreating in early 2026.

In Deutsche Bank estimates, Britain remains “fragmented” from an annual inflation rate of 4 %.

“We expect price pressure to be given in the fourth quarter of 2025, however, follow nearly 3.5 % on an annual basis (on an annual basis) by the end of the year,” said Sanjay Raja, chief economist in the German lender in the comments via e -mail on Friday.

“Moreover, we expect to reduce price pressures next year. In our models, our main CPI slips to about 2.75 % year on an annual basis in the second quarter of 2026, before landing near 2.25 % on an annual basis in the fourth quarter of 2026.