UK inflation rose again last month to higher than expected to 3.8%, amid food price hikes and travel costs.
The latest figures from the Office for National Statistics (ONS) have shown that inflation rose to 3.8% in the year, to July from January 2024.
Primarily, the latest figures were driven by a significant jump in the prices of air fares and food.
According to the ONS, this time inflation is at its highest level since 2024, and subsequently still far above the Bank of England’s target of 2%.
Figures showed that a jump in air fares was behind much of the increase in average prices. The tickets on flights out of the UK rose to 30%, although much of the increase was due to the earlier timing of summer holiday break.
On the other hand, the timings of school holidays likely caused the significant jump in the air fares, higher food prices were driven by an increase to the cost of beef, chocolate and confectionery items.
The Bank of England will slow the pace of interest rate cuts due to the slightly higher than expected increase in inflation.
ONS chief economist Grant Fitzner was of the view that a “hefty” increase of 30.2% in air fares between June and July was the biggest jump for that period. He further stated, “lt was likely due to the timings of this year’s school holidays.”
The prices of petrol and diesel had also increased, compared with a drop this time last year, he added.
While the prices of non-alcoholic beverages and food items rose to 4.9% this year. It was the fourth month in a row in which food and drink inflation had significantly risen.
This year’s rise in the prices of rail fares of 4.6% was one percentage point above the Retail price index (RPI) in July 2024, which means if the same pattern was adopted, fares in 2026 would rise by 5.8%.
In addition, the Department of Transport has said that no decisions have been made yet on next year fares.