Inflation rises to 2.2 per cent, first increase in 2024

The ONS attributed the rise primarily to smaller decreases in gas and electricity prices compared to the same period last year.

• EasternEye
• 14 August, 2024

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By: EasternEye

THE ANNUAL inflation rate rose in July, marking the first increase this year, according to official data released on Wednesday.

The Consumer Prices Index (CPI) increased by 2.2 per cent over the 12 months to July, up from a 2.0-per cent rise in June, as reported by the Office for National Statistics (ONS).

The ONS attributed the rise primarily to smaller decreases in gas and electricity prices compared to the same period last year.

Analysts believe that the faster pace of inflation might slow down the Bank of England’s ability to cut interest rates.

Earlier this month, the Bank of England reduced borrowing costs for the first time since the Covid-19 pandemic began, following a decrease in UK inflation from four-decade highs to near its 2-percent target.

Ruth Gregory, deputy chief UK economist at Capital Economics, commented that Wednesday’s data “may not alleviate the Bank’s concerns about persistent price pressures entirely,” and that it is “probably isn’t enough to prompt a back-to-back interest rate cut in September.”

However, Gregory also noted that she still expects the Bank of England to cut rates again later this year, potentially reducing its main interest rate from 5.0 per cent to 4.5 per cent.

(With inputs from AFP)