Annual inflation rose to 3.8% in July, up from 3.6% in June and slightly above forecasts. Core inflation also reached 3.8% on a 12-month basis. Air fares jumped 30.2% between June and July, the largest monthly July rise since 2001, largely linked to the timing of school holidays. Petrol rose by 2p per litre and diesel by 2.9p between June and July. Restaurant and hotel prices increased due to a rise in overnight stays booked the night before. Food price inflation continued to climb, with coffee, fresh orange juice, meat and chocolate among the biggest risers.
We have taken the decisions needed to stabilise the public finances, and we're a long way from the double-digit inflation we saw under the previous government, but there's more to do to ease the cost of living. That's why we've raised the minimum wage, extended the £3 bus fare cap, expanded free school meals to over half a million more children and are rolling out free breakfast clubs for every child in the country.
The main driver was a hefty increase in air fares, the largest July rise since collection of air fares changed from quarterly to monthly in 2001. This increase was likely due to the timing of this year's school holidays. The price of petrol and diesel also increased this month, compared with a drop this time last year. Food price inflation continues to climb - with items such as coffee, fresh orange juice, meat and chocolate seeing the biggest rises.
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