UK inflation rises by more than expected as travel hikes air fares

UK INFLATION rose by more than expected in July as demand for summer travel pushed up air fares and food prices continued to climb, according to official figures.

- ANNA WISE

Consumer Prices Index (CPI) inflation increased to 3.8% in July, from 3.6% in June, the Office for National Statistics (ONS) said.

Most economists had been forecasting inflation to rise to 3.7%.

It means the headline rate remained at the highest level since January 2024, when it hit 4%.

The ONS said transport was the biggest factor driving up overall inflation last month, particularly due to a spike in flight prices as families booked trips during the school summer holidays.

Air fares soared by 30.2% between June and July, the biggest jump since the collection of monthly data began in 2001.

The average price of petrol rose by 2p per litre between June and July, and the average diesel price by 2.9p per litre over the period, the data showed.

Prices across UK restaurants and hotels also increased last month, largely driven by a jump in overnight hotel stays booked the night before.

Food and drink inflation rose to 4.9% in July, from 4.5% in June.

This marked the fourth month in a row that the annual rate had increased and remained at the highest level since February 2024.