UK inflation hits 18-month high in July

Inflation in the United Kingdom reached its highest level in the past 18 months in July, rising from 3.6% to 3.8%.

Report informs via Reuters that the UK is once again leading in price growth among the world’s largest economies.

Inflation in the UK services sector, closely monitored by the Bank of England, accelerated to 5% from 4.7% the previous month.

The Bank of England had expected overall inflation to reach 3.8% in July but had forecast a smaller increase in service prices—4.9%.

This month, the Bank of England cut interest rates, but only after policymakers approved the move by a narrow margin (5-4).

“The economy is experiencing a period of high inflation and weak growth, which is likely to persist until next spring,” said Deloitte Chief Economist Ian Stewart. He added that it is still unclear whether the Bank of England will cut rates again in 2025.

The Bank of England expects UK inflation to reach 4% in September, double its target, and to remain above 2% until mid-2027.