UK annual inflation rises first time this year

Britain’s annual inflation rate rose in July for the first time this year and is now back above the Bank of England’s target, official data showed on Wednesday.

The rise was “mainly driven by prices of gas and electricity falling by less than a year ago”, the ONS added.

The faster inflation rate could keep the Bank of England from cutting interest rates quickly, according to analysts.

Earlier this month, the BoE trimmed borrowing costs for the first time since the onset of the Covid pandemic after UK inflation retreated from four-decade highs back towards its 2-percent target.

“And it probably isn’t enough to prompt a back-to-back interest rate cut in September.”

Gregory added, however, that she expects the BoE to cut again this year, bringing its main interest rate down to 4.5 per cent from 5.0