Food, transport costs take UK inflation to 18 month high

• Bloomberg

• Published On Aug 21, 2025 at 08:09 AM IST

The pickup was forecast by the BOE but exceeded the 3.7 per cent economists were predicting.

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UK inflation climbed to an 18-month high on the back of surging food, fuel and transport prices, putting the Bank of England under pressure to reconsider the pace of interest-rate cuts.

Consumer prices rose 3.8p per cent from a year earlier, up from 3.6 per cent in June and the fastest pace since January 2024, the Office for National Statistics said Wednesday. The pickup was forecast by the BOE but exceeded the 3.7 per cent economists were predicting.

Services inflation, a closely watched gauge of underlying prices pressures, climbed to 5 per cent, above the BOE’s 4.9 per cent forecast. The pound erased a drop after the report to trade little changed at $1.3502.The July reading does little to settle the debate within the BOE over the path of policy after the tightest of decisions this month when rates were cut a quarter point to 4 per cent and Governor Andrew Bailey warned of “genuine uncertainty” about the next move.