Inflation continued to rise in July, according to new figures from the Office for National Statistics (ONS).
Measured by the Consumer Prices Index (CPI), inflation was stronger than expected at 3.8% in the 12 months to July, up from the 3.6% reported in June.
On a monthly basis, CPI rose by 0.1% in July 2025, compared with a fall of 0.2% in July 2024.
Transport, particularly air fares, made the largest upward contribution to the monthly change.
Core inflation, meanwhile, which takes out volatile factors like energy, food, alcohol and tobacco to give a clear picture of underlying trends, came in at 3.8% in the 12 months to July, up from the 3.7% in June.
Martin Sartorius, principal economist, CBI, said: “Inflation ticked up slightly in July, broadly in line with the Bank of England’s expectations. Higher energy and regulated prices continue to put upward pressure on inflation, and the increase in labour costs following last year’s Autumn Budget are also feeding through.
“Today’s inflation data will reinforce the Monetary Policy Committee’s cautious approach to cutting interest rates going forward. While inflation is projected to ease next year, the risk of second-round effects means that the MPC will not race to loosen policy in the near term. We expect that the MPC will keep rates unchanged in September, as it waits to see how inflation and labour market data develop going into the autumn.”
