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UK CPI rises to 2.9% as services inflation cools
July’s CPI accelerated to 2.9% year over year, while services inflation eased to 3.4% and goods inflation climbed to 2.2%.
UK inflation accelerated in July, with the Consumer Prices Index rising to 2.9% year over year from 2.6%, matching market consensus, according to Action Forex. Prices increased 0.3% month over month, compared with 0.1% in July 2025.
Core CPI was steady at 2.6% year over year, slightly above expectations for 2.5%. But the report’s composition looked less inflationary than the headline, with services inflation easing from 3.6% year over year to 3.4%, while goods inflation accelerated from 1.7% year over year to 2.2%.
Housing and household services were key drivers, lifting annual inflation from 1.2% year over year to 4.6%, and pushing prices up 2.3% month over month. Health inflation also accelerated from 2.5% year over year to 3.7%, while clothing and footwear moved from -0.5% year over year to 0.5%, and alcohol and tobacco rose from 2.1% year over year to 2.5%.
Some increases were offset by softer food inflation, which eased from 1.7% year over year to 1.3%, and by transport inflation slowing from 5.7% year over year to 3.6%. Overall, Action Forex said the July print was firmer at the headline level without a broad reacceleration in underlying pressure, noting services inflation as one of the more persistent components continuing to cool.