Inflation in June 2024 reached 3.6%, the highest rate since January, influenced by rising prices for food, clothing, and transportation. The higher inflation rate is significantly above the Bank of England's target of 2%. Economists had expected the rate to remain at 3.4%. Factors contributing to this increase include higher rail fares and airfares, alongside persistent tax pressures. Average wages increased by 5.2%, but rising prices particularly impact lower-income shoppers. Projections suggest inflation could peak at 4% by autumn.
Prices rose by more than expected in the year to June, pushing inflation to 3.6%, the highest it has been since January 2024. Higher prices for food and clothing, air and rail fares contributed to higher inflation.
Inflation remains much higher than the Bank of England's target rate of 2%, but a cut in the cost of borrowing is still expected at next month's rate-setting meeting.
The higher figure for June was unexpected, with economists having predicted the inflation rate would stay at the 3.4% it hit in April and May.
Yael Selfin, chief economist at KPMG UK, said persistent underlying pressures, including tax rises in April, meant inflation was likely to peak at 4% in the autumn.
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