Overview

• Official ONS data show CPI at 3.8% year on year in July, up from 3.6% in June and above the 3.7% consensus, the highest since January 2024.
• Core CPI also reached 3.8% and services inflation hovered around 5%, signaling persistent underlying price pressures.
• Airfares jumped 30.2% month on month, the largest July rise since records began in 2001, with higher petrol and diesel costs and food inflation at 4.9% year on year.
• RPI rose to 4.8%, raising the prospect of roughly a 5.8% increase in regulated rail fares next year if the government repeats the usual RPI‑plus‑one formula.
• Economists say the upside surprise makes a September rate cut unlikely after the Bank of England trimmed rates to 4% this month, though forecasts still point to a peak near 4% in September before easing.