LONDON (AFP) – Britain’s annual inflation rate rose in July for the first time this year and is now back above the Bank of England’s (BoE) target, official data showed yesterday.
The Consumer Prices Index (CPI) climbed 2.2 per cent in the 12 months to July compared with a two-per-cent annual gain in June, the Office for National Statistics (ONS) 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 BoE from cutting interest rates quickly, according to analysts.
Earlier this month, the BoE trimmed borrowing costs for the first time since the onset of the COVID pandemic after United Kingdom (UK) inflation retreated from four-decade highs back towards its two-per-cent target.
Yesterday’s data “may not alleviate the Bank’s concerns about persistent price pressures entirely”, noted deputy chief UK economist at research group Capital Economics Ruth Gregory.
“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 per cent from 5.0.
