Britain’s annual inflation rate rose in July for the first time this year and is now back above the Bank of England’s target, official data showed on Wednesday.
[ad]
The Consumer Prices Index (CPI) climbed 2.2 percent in the 12 months to July compared with a 2.0-percent annual gain in June, the Office for National Statistics said in a statement.

The rise was “mainly driven by prices of gas and electricity falling by less than a year ago”, the ONS added.

The faster inflation rate could keep the Bank of England from cutting interest rates quickly, according to analysts.
[ad]
Earlier this month, the BoE trimmed borrowing costs for the first time since the onset of the Covid pandemic after UK inflation retreated from four-decade highs back towards its 2-percent target.

Wednesday’s data “may not alleviate the Bank’s concerns about persistent price pressures entirely”, noted Ruth Gregory, deputy chief UK economist at research group Capital Economics.
[ad]
“And it probably isn’t enough to prompt a back-to-back interest rate cut in September.”

Gregory added, however, that she expects the BoE to cut again this year, bringing its main interest rate down to 4.5 percent from 5.0.
[ad]