ONS reveals July rise in inflation

The latest inflation data from the Office of National Statistics (ONS) has revealed the rate of price rises quickened in July for the first time this year.

The ONS recorded that its headline measure of inflation, the Consumer Price Index, rose by 2.2% in the 12 months to the July 2024, up from the 2.0% recorded in June. The increase in inflation represents its first rise in 2024, and remains well below the double-figure inflation recorded in late-2022, and pushes inflation back above the Bank of England’s 2% target level.

The rise comes within a fortnight of the Bank of England’s Monetary Policy Committee opting to lower interest rates now that inflation has fallen from its peak, however this decision was made after the the ONS’ data was gathered and will not have played a role in causing inflation to rise.

Instead, a slowdown in price falls in the energy sector had helped contribute to the slight rise in inflation, with services across the board recording a higher rate of inflation at 5.2%, down 0.5 points on the previous month and offset by deflation for goods with prices 0.6% cheaper than the previous year. Month-on-month, the UK saw deflation in July with products 0.2% cheaper than in June, meaning consumers are less likely to have seen their spending affected by the rise in the annual rate.

Despite the small rise in the CPI, the UK continues to see lower inflation than its neighbours on the continent. The ONS’ counterparts in both France and Germany have each reported 2.5% inflation in July, up 0.1 percentage point on June, and both above the 2.2% rate recorded in the UK.