UK inflationary concerns remain as inflation hits 2.5%

Inflation at 2.5%

The UK inflation rate hit 2.5% in the year to June, the highest for nearly three years, as the ‘re-opening’ of the UK economy continued.

The Consumer Prices Index (CPI) measure of inflation rose from 2.1% in May, the Office for National Statistics (ONS) said, driven by higher transport and fuel costs.

The rate is higher than the Bank of England’s 2% inflation target. That will fuel the debate about whether interest rates need to go up – or at least when.

Sectors most affected

Transport, fuel, restaurant, hotels, clothing, footwear, housing and household spending lead the the way.


The latest rise in the inflation rate will add to pressure on the Bank of England (BoE) to consider increasing interest rates to slow inflation. But so far the BoE, like the Fed, suggest the inflation increase is transitory.

The U.S. inflation rate is running at 3.4% above target.

We’ll see…

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