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Martin Sartorius, Principal Economist responds to inflation data for July 2025

“Inflation ticked up slightly in July, broadly in line with the Bank of England’s expectations. Higher energy and regulated prices continue to put upward pressure on inflation, and the increase in labour costs following last year’s Autumn Budget are also feeding through.  

“Today’s inflation data will reinforce the Monetary Policy Committee’s cautious approach to cutting interest rates going forward. While inflation is projected to ease next year, the risk of second-round effects means that the MPC will not race to loosen policy in the near term. We expect that the MPC will keep rates unchanged in September, as it waits to see how inflation and labour market data develop going into the autumn.” 

Consumer price inflation, UK: July 2025