First Increase In Inflation This Year

Inflation as measured by the Consumer Prices Index (CPI) increased by 0.2% to 2.2% in the year to July 2024 according to the latest report from the Office for National Statistics (ONS), up from 2% compared to the year to June 2024. This represents the first increase in inflation since December 2023, when it increased by 0.1% from 3.9% to 4%. Inflation peaked at a 40 year high in October 2022 at a rate of 11.1%, before finally falling back to the Bank of England's target of 2% in May 2024. It remained at 2% in June 2024, but with the 0.2% increase to 2.2% in July 2024, it has now moved back above the Bank of England's 2% target. The latest increase is largely accounted for by the fact and energy prices have fallen by less than they did a year earlier in July 2023. Inflation is forecast to edge back up towards 2.5% - 3% in the second half of 2024, before falling back again in 2025 to below of the Bank of England's target of 2%.