Rachel Clun
Business reporter

Image source, Getty Images

Office for National Statistics (ONS) chief economist Grant Fitzner said the main driver of inflation was higher air fares, which experienced the largest July increase since the ONS began collecting that data on a monthly basis in 2001.

“This increase was likely due to the timing of this year’s school holidays,” he said.

It’s the highest rate of inflation since January 2024, when annual inflation was 4%.

Rachel Clun
Business reporter

Economists expected inflation to rise to 3.7%, though the Bank of England forecast for July inflation was 3.76%, slightly higher than consensus.

Inflation in the UK has risen to an unexpected 3.8%, the Office for National Statistics says.

We'll bring you more analysis and reaction on this shortly.

Colletta Smith
Cost of living correspondent

Graham Dutton owns 900 animals on his milk farm in Farndon, Cheshire, of which half are dairy cows.

He says he is facing cost pressures “on everything” including equipment and staffing.

“A big chunk of the money each month does go towards staff,” says Graham.

“There's not enough people that are willing to work on a farm, so if there are people willing then it's a struggle to tempt them come and work.”

Graham also grows maize to feed his animals but the drought has meant he has had to buy in fodder, which adds to his expenditure.

“Unfortunately that will mean for the next six months that prices will have to stay quite high to help counteract that,” he adds.

Colletta Smith
Cost of living correspondent

Yakub Lorgat, a father from Blackburn, says he has to make “certain sacrifices” financially in order to prioritise what is best for him and his family.

Currently, making sure his children have a “good time in the summer holidays is the most important thing” for him.

But that comes at a cost and in particular, spending money on eating out and on petrol are all adding to his struggles.

“The price of everything has gone up,” says Yakub. “It’s like [we’re] penny pinching in all areas.”

Tommy Lumby
Business data journalist

Prices across the UK economy rose at an estimated 3.6% in the year to June, the highest annual inflation rate for nearly a year and a half.

That was slightly more than some economists had predicted but was still well below the highs seen in late-2022, as the chart below shows.

Fuel prices were a big driver behind the increased rate in June, while food bills rose at their steepest pace since February 2024.

Rising food and fuel prices are “stretching” Michelle Birkenhead’s finances.

But she says budgeting has been the key to managing her money and planning ahead for social activities.

“It's so expensive,” says Michelle. “It's gone up so much, it's ridiculous. What used to cost us, two years ago, a weekly shop of £100, you're looking at £150.”

While most of Michelle’s living expenses have been increasing, she says she was relieved to find the cost of her car insurance has gone down.

Inflation measures the pace of price increases of goods or services over time.

A classic example is that if a bottle of milk costs £1 in July 2024 but costs £1.05 in July 2025, then annual inflation in milk is 5%.

It’s worth noting that if the rate of inflation slows, that doesn’t mean prices are falling; it means that prices are increasing at a slower rate.

Milk is only one thing bought by shoppers across the UK. The Office for National Statistics tracks the prices of hundreds of items – from regular supermarket goods, to fuel, to travel costs and home furnishings – to work out the overall rate of inflation.

That basket of goods is regularly updated to reflect shopping trends, as consumer preferences change.

The main measure of inflation is the Consumer Prices Index, which is updated each month.

Dharshini David
Deputy economics editor

It’s a far cry from the pace of price rises seen a couple of years ago, but inflation has resurged in recent months – and today we may learn it ticked up in July.

Global commodity prices have contributed to higher food and energy prices.

And analysis from the Bank of England and other economists suggests the government’s own policies – such as increases in minimum wages and National Insurance changes, which push up staffing costs – have added to price rises for food stuffs and kept inflation for some services, such as hospitality, from easing off.

Such factors, the Bank thinks, could see inflation hit 4% in the autumn – before subsiding again.

Again, it’s not the double-digit price rises of a couple of years ago but may be enough to prevent the Bank from cutting interest rates again this year.

A silver lining among all the inflation talk: earnings, including for those who’ve benefitted from those higher minimum wages, have been rising faster than prices, meaning the squeeze has eased for many, albeit slightly.

Rachel Clun
Business reporter

Good morning from the London newsroom.

Today we’ll get the latest data on UK inflation – it’s expected to rise slightly, from 3.6% in the year to June, to 3.7% in the year to July.

Economists expect high grocery prices and travel costs to have added to the upcoming inflation figures.

The Office for National Statistics will publish the latest data at 07:00BST, and we’ll bring you updates as well as analysis from our correspondents as soon as we have it.