UK annual inflation rate hikes for first time in 2024

Britain’s annual inflation rate increased in July for the first time in 2024, climbing to 2.2% from 2.0% in June, according to data released by the Office for National Statistics (ONS) on Wednesday.

This rise brings the inflation rate back above the Bank of England’s (BoE) target of 2%.

The ONS attributed the increase primarily to gas and electricity prices, which fell less sharply compared to the same period last year.

This unexpected uptick in inflation could influence the BoE’s future decisions on interest rates.

Wednesday’s data “may not alleviate the Bank’s concerns about persistent price pressures entirely”, noted Ruth Gregory, deputy chief UK economist at research group Capital Economics.

“And it probably isn’t enough to prompt a back-to-back interest rate cut in September.”

Gregory added, however, that she expects the BoE to cut again this year, bringing its main interest rate down to 4.5 per cent from 5.0.

AFP