Inflation in United Kingdom

United Kingdom Inflation | Economic News & Forecasts

United Kingdom - Inflation

Inflation moves into double figures in July

Consumer prices rose 0.61% in July over the previous month, slowing down from the 0.80% increase recorded in June. Looking at the details of the release, prices for recreation and culture rose at a faster pace in July. However, prices for transportation increased at a more moderate rate. Meanwhile, housing and utilities prices grew at a quicker pace.

Despite the month-on-month moderation, annual inflation rose to 10.1% in July, following June’s 9.4%. July's figure represented the highest inflation rate since the early 1980s, and was above market expectations. Annual average inflation rose to 6.5% in July (June: 5.8%). Finally, core inflation rose to 6.2% in July, from June’s 5.8%.

July’s inflation reading is likely to spur the Central Bank into another aggressive rate hike at its September meeting. Inflation is expected to rise further from its current level by year-end, due to a tight labor market and the re-rating of Ofgem’s energy price cap from October—recent reports suggest the cap could rise by as much as 75% from its current level.

FocusEconomics Consensus Forecast panelists expect inflation to average 8.5% in 2022, up 0.3 percentage points from last month’s forecast, and 5.0% in 2023.

United Kingdom - Inflation Data

2015   2016   2017   2018   2019  
Inflation Rate (CPI, annual variation in %)0.0  0.7  2.7  2.5  1.8  

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United Kingdom Inflation Chart

United Kingdom Inflation
Note: Annual variation of consumer price index (CPI) in %.
Source: Office for National Statistics (ONS).

United Kingdom Facts

Value Change Date
Bond Yield0.83-3.04 %Jan 01
Exchange Rate1.33-0.35 %Jan 01

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