Inflation in the UK has risen for the first time this year. official figures show.
This means that prices rose by a total of 2.2 percent in the period up to July (up from 2 percent in June), thus failing to meet the Bank of England’s target.
However, an increase had been generally expected, largely due to the fact that gas and electricity prices fell less than in the previous year.
The bank expects inflation to continue to rise this year before falling again.
Grant Fitzner, chief economist at the Office for National Statistics (ONS), said: “Inflation rose slightly in July as household energy costs fell, but the decline was smaller than a year ago.”
“This was partially offset by hotel costs, which declined in July after strong growth in June.”
Inflation, which measures the rate of price increases, rose to 11.1 percent in the wake of the Ukraine war and pandemic-related supply chain bottlenecks, driving up the cost of living for millions of people.
But by June, the base rate had been falling steadily as the Bank of England raised interest rates to a 15-year high to curb consumer demand.
However, Mr Fitzner told the BBC’s Today programme that price increases remained under control “under the hood”, with services sector inflation falling in July and food prices unchanged.
“This still suggests that inflationary pressures are fairly moderate, at least in the short term,” he said.
The Bank of England is likely to take July’s rise in inflation into account in its next vote on interest rates in September.
Last month it cut interest rates from 5.25% to 5% – the first cut since the pandemic began – and experts are predicting further cuts this year.
Darren Jones, chief secretary to the UK Treasury, said the new Labour government had “no illusions” about the challenges still facing households.
However, Shadow Chancellor Jeremy Hunt said the new figures showed that “more needs to be done to keep inflation low”.
