CPI inflation in the UK reaches 2.2% – the first growth in more than six months | Business News

The pace of price rises accelerated, according to official data.

The inflation rate rose to 2.2% in July, above 2% a month earlier, data from the Office for National Statistics showed.

It’s the first time since December last year that the rate increased, rather than falling. This means that prices rose a little faster than before.

But it rose less than what central bankers at the Bank of England and economists consulted by Reuters had predicted.

These observers predicted an increase to 2.3%.

What could this mean for interest rates?

Lower-than-expected inflation could help rate-setters at the Bank reduce interest rates faster or sooner.

Because of high inflation, interest rates have risen, making loans more expensive. Currently, investors expect the interest rate to be maintained at 5% at the Bank’s next rate-setting meeting in September.

There was also a better than expected fall in another inflation measure, closely analyzed by the Bank. Underlying inflation, which measures price increases excluding volatile food and energy costs, fell to 3.3% from 3.5% in June.

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Analysts now believe there is a greater chance of a rate cut next month. Before the inflation data arrived, there was a 36% chance, which rose to a 45% probability of a cut

More expensive train tickets?

Train ticket prices typically increase in line with the July retail price index (RPI) measure of inflation.

If the increase is implemented in January, train tickets will be 3.6% more expensive.

The government, however, may decide not to increase prices in line with the RPI, since I did it last year.

Why did inflation rise?

The main reason inflation is higher is because energy bills didn’t fall as much over the summer as they did last year, the ONS said.

Higher gas and electricity prices have meant rising raw material costs, which the ONS has also identified as a cause of rising inflation.

Acting to reduce costs was to reduce hotel and restaurant prices. Services inflation fell to 5.2%.

In response to the figures, Chief Secretary to the Treasury Darren Jones said:

“The new government is under no illusions about the scale of the challenge we have inherited, with many families still struggling with the cost of living.

“That’s why we are taking difficult decisions now to fix the foundations of our economy, so we can rebuild Britain and make every part of the country better.”