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The
Office for National Statistics said consumer prices rose by an
annual rate of 3.6% in June, up from 3.4% in May. That was the
highest rate since January 2024.
The statistics agency said higher food prices was largely behind
the increase. Fuel and transport costs also contributed.
Though inflation remains way above the Bank of England's target
rate of 2%, most economists think the central bank will opt to
cut interest rates again at its next meeting on Aug. 7 as
sluggish economic growth is anticipated to weigh on prices over
the coming year or two.
Since its first quarter-point rate cut last August from the
16-year high of 5.25%, the Bank of England has played it steady,
reducing interest rates every three months to the current 4.25%.
However, some economists believe the higher inflation rate may
cause some jitters among rate-setters, which could see the bank
delay further reductions.
“While June’s hot inflation won’t deter policymakers from
sanctioning an August policy loosening, given mounting worries
over economic conditions, these figures may increase caution
over the pace of future rate cuts,” said Suren Thiru, economics
director at the Institute of Chartered Accountants in England
and Wales.
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