Rachel Reeves is to blame for the 3.5% inflation spike
If you want to use the government's preferred measure, CPIH, which includes an element of housing costs, then that too is higher than CPI, at 4.1 percent. Housing costs, energy costs, food, transport – all are going up – with just a small drop in prices of clothing and footwear, and furniture.
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South Wales Guardian
5 hours ago
- South Wales Guardian
Where inflation jumped in July – and where it eased
The average cost of air tickets was 15.5% higher last month than it was a year earlier, compared with an annual rise of just 0.5% in June, according to data published by the Office for National Statistics (ONS). When comparing figures month on month, air fares jumped 30.2% between June and July: more than double the rise of 13.3% between the same months in 2024, and the largest July increase since monthly inflation data for air travel began in 2021. Prices accelerated for a range of household groceries last month, which further pushed up the cost of living. The average cost of coffee was up 18.0% year on year in July compared with 12.3% in June; tea was up 4.9% compared with 0.5%; fruit juices were up 8.6% compared with 3.6%; and whole milk was up 11.3% compared with 8.4%. Inflation also picked up pace for margarine, eggs, potatoes, crisps, breakfast cereals, chocolate and bread. Energy bills edged higher, with electricity costs up 8.0% year on year in July, greater than the 4.5% jump in June, while gas was up 13.0% compared with 12.3% the previous month. Both petrol and diesel recorded a negative annual rate of inflation in July, but by a smaller margin than in June, indicating a rise in the cost of filling up at the pumps. The average price of petrol in July was down 7.3% year on year, compared with a fall of 9.5% the previous month, while diesel was down 6.0% compared with a previous drop of 8.6%. Not everything saw a jump in price last month, however. Items where prices fell faster year on year in July than in June included pasta and couscous, fish, olive oil and sugar. Inflation eased for cheese, which stood at 3.4% in July compared with 5.2% in June, while children's shoes swung from positive annual inflation (1.9%) to negative (down 1.9%). Below are some examples of how the Consumer Prices Index (CPI) inflation rate has eased or accelerated. Two figures are listed for each item: the average rise in price in the 12 months to June, followed by the average rise in price in the 12 months to July. – Examples where annual inflation has accelerated, ranked by the size of change: Passenger air travel: June up 0.5%, July up 15.5%Coffee: June up 12.3%, July up 18.0%Cinemas/theatres/concerts: June up 0.4%, July up 5.7%Fruit & vegetable juices: June up 3.6%, July up 8.6%Tea: June up 0.5%, July up 4.9%Electricity: June up 4.5%, July up 8.0%Hotels/motels: June down 2.7%, July up 0.3%Whole milk: June up 8.4%, July up 11.3%Breakfast cereals: June up 2.2%, July up 5.1%Eggs: June up 3.4%, July up 4.9%Ready-made meals: June up 4.5%, July up 5.7%Potatoes: June up 0.7%, July up 1.9%Crisps: June up 4.2%, July up 5.1%Chocolate: June up 16.3%, July up 17.2%Women's clothes: June up 2.3%, July up 2.9%Soft drinks: June up 5.6%, July up 6.1% – Examples where annual inflation has eased: Children's footwear: June up 1.9%, July down 1.9%Passenger train travel: June up 8.4%, July up 6.1%Fridges/freezers: June up 1.7%, July down 0.5%Dried fruit/nuts: June up 7.4%, July up 5.4%Cheese/curd: June up 5.2%, July up 3.4%Yoghurt: June up 3.0%, July up 1.2%Children's clothes: June down 2.1%, July down 3.8%Pasta/couscous: June down 0.7%, July down 2.1%Fish: June down 0.4%, July down 1.8%Washing machines/dryers: June down 2.0%, July down 3.4%
Leader Live
5 hours ago
- Leader Live
Where inflation jumped in July – and where it eased
The average cost of air tickets was 15.5% higher last month than it was a year earlier, compared with an annual rise of just 0.5% in June, according to data published by the Office for National Statistics (ONS). When comparing figures month on month, air fares jumped 30.2% between June and July: more than double the rise of 13.3% between the same months in 2024, and the largest July increase since monthly inflation data for air travel began in 2021. Prices accelerated for a range of household groceries last month, which further pushed up the cost of living. The average cost of coffee was up 18.0% year on year in July compared with 12.3% in June; tea was up 4.9% compared with 0.5%; fruit juices were up 8.6% compared with 3.6%; and whole milk was up 11.3% compared with 8.4%. Inflation also picked up pace for margarine, eggs, potatoes, crisps, breakfast cereals, chocolate and bread. Energy bills edged higher, with electricity costs up 8.0% year on year in July, greater than the 4.5% jump in June, while gas was up 13.0% compared with 12.3% the previous month. Both petrol and diesel recorded a negative annual rate of inflation in July, but by a smaller margin than in June, indicating a rise in the cost of filling up at the pumps. The average price of petrol in July was down 7.3% year on year, compared with a fall of 9.5% the previous month, while diesel was down 6.0% compared with a previous drop of 8.6%. Not everything saw a jump in price last month, however. Items where prices fell faster year on year in July than in June included pasta and couscous, fish, olive oil and sugar. Inflation eased for cheese, which stood at 3.4% in July compared with 5.2% in June, while children's shoes swung from positive annual inflation (1.9%) to negative (down 1.9%). Below are some examples of how the Consumer Prices Index (CPI) inflation rate has eased or accelerated. Two figures are listed for each item: the average rise in price in the 12 months to June, followed by the average rise in price in the 12 months to July. – Examples where annual inflation has accelerated, ranked by the size of change: Passenger air travel: June up 0.5%, July up 15.5%Coffee: June up 12.3%, July up 18.0%Cinemas/theatres/concerts: June up 0.4%, July up 5.7%Fruit & vegetable juices: June up 3.6%, July up 8.6%Tea: June up 0.5%, July up 4.9%Electricity: June up 4.5%, July up 8.0%Hotels/motels: June down 2.7%, July up 0.3%Whole milk: June up 8.4%, July up 11.3%Breakfast cereals: June up 2.2%, July up 5.1%Eggs: June up 3.4%, July up 4.9%Ready-made meals: June up 4.5%, July up 5.7%Potatoes: June up 0.7%, July up 1.9%Crisps: June up 4.2%, July up 5.1%Chocolate: June up 16.3%, July up 17.2%Women's clothes: June up 2.3%, July up 2.9%Soft drinks: June up 5.6%, July up 6.1% – Examples where annual inflation has eased: Children's footwear: June up 1.9%, July down 1.9%Passenger train travel: June up 8.4%, July up 6.1%Fridges/freezers: June up 1.7%, July down 0.5%Dried fruit/nuts: June up 7.4%, July up 5.4%Cheese/curd: June up 5.2%, July up 3.4%Yoghurt: June up 3.0%, July up 1.2%Children's clothes: June down 2.1%, July down 3.8%Pasta/couscous: June down 0.7%, July down 2.1%Fish: June down 0.4%, July down 1.8%Washing machines/dryers: June down 2.0%, July down 3.4%
Leader Live
5 hours ago
- Leader Live
Why has inflation risen and what does it mean for households?
The Office for National Statistics (ONS) said Consumer Prices Index (CPI) inflation increased to 3.8% last month, from 3.6% in June. It was slightly higher than the 3.7% rate that most economists had been expecting for the month. Here, the PA news agency looks at what is behind the latest increase and what it means for households and the economy. – What is inflation? Inflation is the term used to describe the rising price of goods and services. The inflation rate refers to how quickly prices are going up. July's inflation rate of 3.8% means if an item cost £100 a year ago, it would now cost £103.80. It is above the 3.6% rate recorded in June, meaning that prices were increasing at a faster rate than they previously were. – What made inflation go up? The ONS said the biggest factor driving up inflation last month was a jump in transport prices. This was particularly the case for air fares, which rocketed by 30.2% between June and July – the largest increase since monthly data began being collected in 2001. The increase was likely caused by the timing of the school holidays, according to the ONS, with families typically facing higher prices to take trips during the peak summer season. Motor fuel costs also contributed, with both average petrol and diesel prices increasing between June and July. In the shops, consumers were likely to have seen certain foods like coffee, chocolate, meat and juice getting more expensive last month. The overall rate of food and drink inflation rose to 4.9% in July from 4.5%, the fourth month in a row that price rises have accelerated. – Will inflation keep rising? Economists think CPI inflation will keep rising to a peak of 4% in September, before price rises start to ease. This would be double the 2% target that the Bank of England is set to keep inflation under control. Philip Shaw, an economist for Investec, said he thinks food inflation is likely to edge higher in the coming months amid tougher conditions for suppliers and retailers. 'Beyond this though, inflation looks set to decline,' he said. 'The imposition of VAT on private school fees will drop out of the calculation in January, while the same will happen to a hefty jump in water charges in April. 'Further ahead, we remain of the view that a loosening in conditions in the labour market, in particular easing pay growth, will result in lower services inflation over the course of 2026. 'Hitting the 2% inflation target may be out of reach next year, but should be within sight in 2027.' – What does it mean for interest rates? Economists said the Bank of England could have some concerns about rising inflation in the UK's sprawling services sector, which the central bank pays close attention to. The annual rate of services CPI inflation rose to 5% in July from 4.7% in June. However, experts also think wage growth could continue to come down which would reduce consumer spending power. James Smith, a developed market economist for ING, said he sees it as 'still more likely than not' that the Bank will cut interest rates in November, followed by two further reductions next year. Mr Shaw said a rate cut in November will likely 'depend on how clear the signs are that inflation will resume its decline towards the end of the year and beyond'. Elliott Jordan-Doak, senior UK economist for Pantheon Macroeconomics, was more certain that inflation remaining above-target for the foreseeable future will be 'forcing' the Bank to keep rates on hold for the rest of 2025 at least.
