Tomorrow, the UK will provide an update on inflation rates. In June, the consumer price index (CPI) hit 3.6% in the 12 months to June 2025, up from 3.4% in the 12 months to May. The was the highest since January 2024.
On a monthly basis, CPIH rose by 0.3% in June 2025, compared with a rise of 0.2% in June 2024.
Barclay’s anticipates CPI will continue to move higher in advance of the UK Office of National Statistics report.
Julien Lafargue, Chief Market Strategist at Barclays Private Bank, says:
“UK headline CPI inflation is expected to edge up to 3.7% year-on-year in July, slightly above June’s 3.6%, driven by higher food, hotel, and fuel prices. Core inflation, meanwhile, is projected to remain steady at 3.7%, with weaker pricing in clothing and footwear offset by stronger trends in transport and housing services.
Lafarge adds that services inflation is tracking even higher, influenced by seasonal adjustments and hotel price dynamics.
“Overall, the data suggests modest upward pressure on inflation. This is unlikely to provide much comfort to the Bank of England, which remains divided on the path for monetary policy going forward. Against this backdrop, the prospect of an additional interest cut this year looks increasingly unlikely.”