Good news today as the inflation rate remains steady at 2% - the Bank of England’s target. The Office of National Statistics reported the forecasts from economists had placed the inflation rate at 1.9%, which unfortunately has not been met.

Inflation within sectors

The Bank of England was hoping for service inflation to be down to 5.1% however, this remains at 5.7%.

The so called, Taylor Swift effect could be causing hotel prices to be up by 9.8% up from 7% as her Eras Tour makes it’s way around the UK. With summer starting, the season of concerts and getaways begins causing hotel prices to increase.

  • ONS report that the sector experiencing the lowest rate of inflation was clothes and footwear.
  • The sectors keeping inflation high are hotel prices, restaurants, transport and household services.
  • The price of restaurants and cafes saw a monthly rise of 0.3%, lower than the 0.5% rise in the previous year.
  • Transport inflation is largely due to the price of second hand cars where prices have decreased by 0.3% compared with a decrease of 1.9% a year ago.
  • Food inflation led the way in the dropping inflation rate in previous months. ONS reports that the price of food and non-alcoholic beverages rose by 1.5%  in the year to June 2024 compared with the rise of 1.7% the previous year.

 

Bank of England decisions

The Bank of England next meet every 6 weeks to discuss any changes and decide on the base rate. They will meet next on the 1st August.

Many hope they will drop the base rate from it’s current 5.25% however with several sectors remaining high this could be unlikely.