The Office of National Statistics has reported that inflation for July has risen to 2.2%. This is the first rise of 2024 after inflation fell during the early part of the year and then settled at 2% for May and June.
A rise was expected because energy prices are now falling by less than they were doing a year ago.
This means that inflation has now gone back above the Bank of England’s target. However, the Bank themselves expected this, and many economic forecasters are predicting that inflation will stay above 2% for the rest of the year.
Encouragingly, inflation for services dropped from 5.7% to 5.2% in July. This was a larger drop than expected and is primarily due to a fall in inflation on restaurant and hotel pricing. It seems this may be due to the temporary effect on pricing brought about by Taylor Swift’s concerts, as well as increases to cover the minimum wage uplifts now levelling off.
The increase suggests that there is still pressure on prices and so business owners need to continue careful budgeting of costs as well as reviewing pricing to ensure profit margins.
See: https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/consumerpriceinflation/latest
It appears that the government has backtracked on plans to require workers to register with its new digital ID programme to prove their right to work in the UK.
The Department of Work and Pensions (DWP) has confirmed that all key auto-enrolment pension thresholds will remain unchanged for 2026/27.