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UK CPI rises to 2.9% YoY in July, keeping BoE rate outlook in focus

The monthly CPI increased 0.3% in July, and the core CPI rose 2.6% YoY, leaving inflation further above the BoE’s 2% target.

Reported · Written up by our desk · Major Pairs

The UK Office for National Statistics reported that headline UK CPI rose to 2.9% year over year in July, up from 2.6% in June, exceeding the Bank of England’s 2% inflation target. Core CPI, excluding volatile food and energy items, also held at 2.6% YoY, slightly hotter than the 2.5% forecast.

The monthly CPI measure climbed 0.3% in July versus a 0.1% increase in June, aligning with market expectations of 0.3%. Markets had expected headline inflation of 2.9% for the period.

In reaction to the data, the British pound edged higher, with GBP/USD trading 0.08% up at 1.3545 at the time of writing. FXStreet noted that the inflation print could influence expectations around a potential Bank of England interest rate hike in September, potentially adding volatility to sterling as traders assess the inflation impact of energy price swings.

Latest closeGBP/USD 1.354 ▲0.3%

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