UK inflation expected to rise
One economist suggested an 'Oasis bump' may have contributed to higher accommodation prices in July.
Consumer price index (CPI) inflation is widely expected to have risen in July from the 3.6% recorded in June, when the Office for National Statistics (ONS) publishes its latest dataset on Wednesday.
Sanjay Raja, senior economist at Deutsche Bank, estimated that price pressures could have pushed CPI to 3.8% last month.
'July inflation will likely see price momentum rise further into uncomfortable territory,' he wrote in a research note.
The school summer holidays likely pushed airfares, rail costs, and package holiday prices higher. Raja also noted a possible spike in hotel prices, partly attributed to British band Oasis kicking off their reunion tour in July, which drew large crowds to arenas in Cardiff, Manchester, London, and Edinburgh.
Accommodation prices could have risen by as much as 9% in July compared with June, 'with the Oasis concerts having a strong impact on Manchester prices alone,' Raja said.
Meanwhile, food prices have been rising in recent months, driven by higher costs for ingredients, labor, and regulatory compliance. Annual food price inflation increased for the third consecutive month in June, reaching its highest rate since February 2024. Raja said food inflation likely continued to rise in July but may be 'nearing the peak.' Andrew Goodwin, chief UK economist at Oxford Economics, forecast CPI inflation to edge up to 3.7% in July, noting that higher fuel prices at the pumps could also push monthly inflation higher.
The Bank of England projects inflation will increase further this year, peaking at around 4% in September before easing over the next two years. The central bank highlighted accelerating food and energy prices as key drivers of the recent uptick in inflation. — dpa
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