FX.co ★ UK Inflation Rises to 3.6%, a 2024 High

In June 2025, the United Kingdom experienced an increase in its annual inflation rate to 3.6%, marking the highest rate since January 2024. This rise follows a 3.4% rate in May and surpasses previous expectations that it would remain stable. The primary factor contributing to this increase was the rise in transport costs, which saw a 1.7% jump compared to 0.7% in May. This surge was notably influenced by higher motor fuel expenses. Additional contributors included increased airfares, especially on long-haul and European routes, alongside elevated costs for rail travel and maintenance of personal vehicles. There was also an uptick in clothing and footwear prices, moving to 0.5% from a previous decline of -0.3%, while food prices rose to 4.5%, the highest since February 2024, driven by items such as cakes and cheddar cheese. Conversely, services sector inflation remained stable at 4.7%, with a slight easing observed in housing and utilities (down to 7.5% from 7.7%) and household services (decreasing to 6.7% from 6.9%). On a monthly scale, the Consumer Price Index (CPI) saw a 0.3% rise, exceeding the 0.2% increase recorded in May. Core inflation also picked up pace, with the annual rate reaching 3.7% and a monthly increase of 0.4%.