UK CPI inflation unexpectedly rises to 3.6% in June
British inflation has risen steadily since touching a three-year low of 1.7% last September, and in May the Bank of England forecast it would peak at 3.7% in September - almost twice the central bank's 2% target.
June's reading from the Office for National Statistics took the annual CPI rate to its highest since January 2024.
Higher transport costs, especially motor fuels, were the biggest contributor to the rise in the inflation rate between May and June, the ONS said.
Sterling rose slightly against the dollar after the data, which may put pressure on the BoE not to cut interest rates at its next meeting in August.
Previously, April brought a particularly sharp jump in inflation to 3.5% due to rises in regulated energy and water tariffs, a spike in air fares, and upward pressure on the cost of labour-intensive services from a rise in employment taxes and the minimum wage.
Despite this, Governor Andrew Bailey has said interest rates are likely to remain on a gradual downward path, as a weaker labour market puts downward pressure on wage growth and the outlook for economic growth remains lacklustre.
The BoE has cut interest rates by four quarter-point steps since August and economists polled by Reuters last month forecast two more quarter-point rate cuts this year.
However, some BoE policymakers are concerned that skills mismatches in Britain's labour market and other supply constraints will keep wage growth running too fast for inflation to return to target any time soon.
Services price inflation, a measure the BoE views as a better guide to domestically generated price pressures than the headline CPI rate, held at 4.7% in June, in contrast to economists' forecasts for it to fall to 4.6%.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The National
an hour ago
- The National
Egyptian-American economist vying to be next Chancellor of Cambridge
Dr Mohamed El-Erian describes the University of Cambridge as his 'happy place'. The Egyptian-American economist, known to millions as a globe-trotting economist who has shaped thinking about historic twists in the world's fortunes, graduated from Queens' College in 1980. After a successful career – working at the International Monetary Fund, as a bond trader, adviser to US President Barack Obama, author and columnist – he returned to his alma mater as president in 2020. He's genuinely one of the kindest people that I've ever met Georgia Box He now hopes to be elected chancellor of the university, an 800-year-old role that has been held by princes and prime ministers. In a ballot of alumni, he is pitted against two lords, a TV presenter, an anti-Brexit campaigner and several academics and business leaders, with the result due to announced by July 23. Dr El-Erian, who was named in the Top 100 Global Thinkers by Foreign Policy magazine and made Worth magazine's list of 100 Most Powerful People in Finance, he has endorsements from former UK prime minister Gordon Brown, Google DeepMind co-founder Demis Hassabis and businesswoman Arianna Huffington. He was born in New York to Egyptian parents, and his father worked as an ambassador, judge and at the United Nations. He grew up in the US and Egypt, as well as being educated at boarding school in England. He won the economics category of the Great Arab Minds awards in 2023. He has run a vigourous social media campaign, mixing his serious message about the transformation he believes is needed at Cambridge with light-hearted interviews gently ribbing rival university Oxford. Dr El-Erian has been seen wearing a Queens football shirt and also gave a tour of his home office which features a giant poster of Cambridge. 'I am happiest here, just ask my daughters,' he says in that video. He sets out his proposals for how the chancellor's role should change: making it less ceremonial and more practical, ensuring the university is on a sound financial footing and open to the international community. As co-chairman of the Cambridge Capital Campaign he has helped bring in £2.2 billion of investment to Queens. 'Cambridge must redouble its efforts to attract funding and donations,' he said in his campaign statement. 'I've seen first-hand how innovation and philanthropy help to support vital research, expand opportunities, and better secure our future. 'If elected chancellor, I'll intensify these efforts by helping to tap into global philanthropic opportunities and to attract the investment Cambridge needs.' He has also spoken about the need to understand how Cambridge can give students a foundation for life. 'Throughout my time here it's been about identifying what the problem is and fix[ing] it,' he said in a video discussing the need for flexible scholarships. In footage filmed on the grassy bank of the River Cam as punts glide past, Georgia Box, an associate at Deutsche Bank, was interviewed about why she was supporting Dr El-Erian. He explained how she was under pressure to start earning, using her new degree, but not continue her studies at a higher level. He helped to design a scholarship that would not just pay for fees and living accommodation, but also 'something extra'. Ms Box said: 'He cares a lot about each and every student. He's genuinely one of the kindest people that I've ever met. I think he's just an excellent leader and I can't think of anyone else that's better for the job.' In her submission to be chancellor, broadcaster Sandi Toksvig points out: 'The first known chancellor of Cambridge was Richard of Wetheringsett who served sometime between 1215 and 1232. After that we have had a plethora of other Richards, many Johns and an awful lot of Stephens. 'After 800 years I wonder if it isn't time for a change,' she asks. Dr El-Erian will be hoping to add the name Mohamed to that list.
Zawya
18 hours ago
- Zawya
State Minister Calls for Rigor and Responsibility in Economic Discourse at Ethiopian Economics Association (EEA) Conference
State Minister of Finance, Dr. Eyob Tekalign, opened the 22nd International Conference on the Ethiopian Economy, organized by the Ethiopian Economics Association (EEA). In his keynote address, Dr. Eyob praised the EEA for its consistent contribution to policy-relevant research over more than two decades, highlighting the Association's role as a vital platform for evidence-based economic dialogue. In his opening speech the state minister conveyed a strong message on the importance of professionalism, analytical rigor, and responsible communication in shaping the nation's economic future. The State Minister also outlined the progress Ethiopia has made under its ongoing macroeconomic reform program, noting significant gains in inflation control, export performance, debt sustainability, and tax revenue mobilization. Beyond the macroeconomic achievements, Dr. Eyob shed light on a growing challenge in the public policy space: the need for clarity, integrity, and responsibility in economic analysis and communication. 'In recent months, we have witnessed how unclear communication or imprecise use of statistics, particularly around sensitive issues such as debt sustainability, can sow confusion and erode public confidence,' Dr. Eyob remarked. 'In today's fast-moving information environment, rigor and clarity are not optional—they are essential.' He emphasized the EEA's unique responsibility as a trusted and independent economic institution to uphold the highest standards of analysis and avoid sensationalism or politicized interpretations. Dr. Eyob underscored the Ministry of Finance's readiness to deepen collaboration with the EEA and other institutions that share a commitment to informed, evidence-based policymaking. The annual international Conference on the Ethiopian Economy brings together leading economists, academics, policymakers, and practitioners to deliberate on key economic developments and policy directions. Distributed by APO Group on behalf of Ministry of Finance, Ethiopia.
Gulf Today
18 hours ago
- Gulf Today
Here's how to not lose your mind when applying for jobs
Helen Coffey, The Independent That is what I wish to offer our beleaguered Gen Zs in this, their time of need. The culture wars often seek to divide my kind (millennials) from yours (genuine young people), but we shall be divided no longer. For now, finally, we really do have common ground that binds us: getting the fuzzy end of the lollipop when it comes to finding gainful employment. In 2008, I proudly graduated from university with a first-class degree — admittedly in drama — and big dreams, ready to take my bite out of the big, wide world. Finding a job would be child's play, I assumed; I had an exemplary academic record, a 'can-do' attitude and a CV filled with real-world work experience thanks to an assortment of term-time and holiday jobs. I was young, I was hungry, I was an asset. Wasn't I? Alas, 2008, if you remember that fateful year, coincided with the global financial crash. It was not a good time to be an unskilled 21-year-old looking for a job, to put it mildly. Between 2008 and 2009, UK unemployment skyrocketed by the steepest jump in any 12-month period of the last 30 years, leaping from 5.71 to 7.63 per cent. The rate rose for the following two years, reaching a high of just over 8 per cent in 2011. This was borne out by my futile job hunt, during which I was forced to move home with my mother, sign on to jobseekers allowance and spend every tedious, drudge of a day for the next four months submitting my CV for entry-level roles that had already attracted thousands of applications. It was like the Hunger Games of job seeking – and the odds were never in my favour. They were never in anyone's favour. Cut to 2025, and Gen Z are facing their own job drought. The numbers may not be quite so dire as those during that extra spicy Noughties recession, but they paint a picture that is, nevertheless, hauntingly familiar in its bleakness. According to newly released official numbers from the Office for National Statistics (ONS), UK unemployment has risen to its highest rate in four years, 4.7 per cent. The data also shows that the number of job vacancies fell to 727,000 for the April to June period. That is the lowest it's been for a decade — including during pandemic lockdown periods when businesses were forced to implement literal hiring freezes. Of course, the demographic usually most affected by any downturn in prospects is young people – those just starting out in their careers, attempting to get full-time work straight out of school, college or university. In June, The Guardian reported that graduates are facing the toughest UK job market since 2018. What's exacerbated the situation for this cohort is AI; since the launch of ChatGPT in November 2022, the number of entry-level jobs has fallen by almost a third (31.9 per cent). It's in part thought to be because junior roles, such as data entry and tedious form filling, could easily be mopped up by artificial intelligence programmes. The big cheeses aren't even denying it. Dario Amodei, the chief executive of AI firm Anthropic, recently claimed that AI could wipe out up to half all entry-level jobs in as little as five years, and argued that UK unemployment could rise to 10 or 20 per cent in that time; another AI company's viral advertising campaign recently got people's backs up with punchy slogans such as 'Stop hiring humans'. And there are already real-world consequences: BT announced in 2023 that it expects 10,000 jobs to be lost to artificial intelligence by the end of this decade. Then there are rising labour costs, with employers squeezed even more by increased national insurance contributions and a higher minimum wage. Slashing headcounts is clearly the quickest and easiest way to ride out such rises. In fact, the ONS data reveals that the number of people on PAYE payroll has fallen in seven of the eight months since Rachel Reeves, the chancellor, announced the NICs rise. But behind all the stats are those affected by them, real people who are more than just numbers or faceless 'candidates'. I've already seen numerous personal stories of young people frantically scrambling to find work to no avail, up against hundreds of rival candidates, with little hope that their CV will be glanced at, let alone bag them an interview. Caitlin Morgan, a 23-year-old finance and accounting graduate from Swansea University, recently told the BBC about her nightmarish job hunt. She'd spent 18 months applying for more than 600 posts before she finally got hired. 'I see you, Caitlin Morgan!' I wanted to tell her upon reading the story. 'I know your pain...' In fact, I see all you poor, exhausted, desperate Gen Z job hunters out there, wondering if you'll ever win the 'lottery' — because that's what it feels like — of merely securing full-time work. I see you because that was my origin story, too. So here's my advice, woefully out-of-date and toothless as it may be 17 years down the track: remember, it's not you. It's the economy.
