July saw a slower-than-expected increase in UK inflation

Following a run of declining readings since February 2023, data from the Office for National Statistics on Wednesday verified a largely anticipated increase in inflation in July.

Although the growth was less than experts' predictions of 2.3%, consumer prices increased by 2.2% in May and June after readings that were in line with the Bank of England's 2% objective in both months.

The ONS reports that this occurred as July's price declines for gas and electricity were slower than they were a year earlier.

According to the ONS, the biggest factors that caused costs to decline were restaurants and hotels, which had previously increased before declining in the year ending in July.

While core inflation, which does not include the cost of food and drink, decreased from 4.2% to 4.1% in June and July, the consumer price index, which includes owner occupiers' housing expenses, increased by 3.1% in July compared to 2.8% in June.

However, Scott Douglas, director of the financial company Centrus, pointed out that the increase was probably going to support forecasts that the lawmakers would maintain base interest in September.

He stated, "The Bank of England will want to ensure that further rate cuts do not cause inflation to run ahead of schedule. The previous cut was finely balanced with five votes against four."

(Sources: investing.com, proactiveinvestors.co.uk)