Inflation in Britain will reach 3.8% in July 2025
The UK's annual inflation rate increased to 3.8% in July 2025, up from 3.6% in June, primarily due to significant price rises in the transport sector.
The transport sector was the primary driver of the increase, with the largest upward contribution to the change in the annual inflation rate coming from the sector. Air fares played a significant role in this increase, experiencing a 30.2% surge in July, largely due to school summer holidays. Higher motor fuel costs, sea fares, and roadside recovery services also contributed to the rise.
Other sectors that saw inflation increases in July include restaurants and hotels, driven by increased overnight hotel stays, and food and non-alcoholic beverages, which saw inflation rise to 4.9%.
However, the housing and household services sector partly offset this increase, with inflation easing from 6.7% to 6.2%.
Core inflation (which excludes energy, food, alcohol, and tobacco) also edged up to 3.8% from 3.7%, reflecting broadly sustained price pressures in goods and services.
Here's a breakdown of the sectors' contributions to the inflation rise:
| Sector | Contribution to Inflation Rise | |-------------------------|-----------------------------------------------| | Transport | Largest upward contributor; airfares +30.2% | | Restaurants & Hotels | Increased inflation from overnight stays | | Food & Non-Alcoholic | Inflation increased to 4.9% | | Housing & Household | Offset rise; inflation eased from 6.7% to 6.2% |
The latest inflation data highlights transport prices as the prime driver of the inflation increase. This increase occurs against the backdrop of ongoing cost-of-living pressures in the UK, stemming from previous periods of high inflation and elevated energy prices.
The inflation rate data for the transport sector in May 2025 was not released in the data provided, along with the transport sector's annual inflation rate in July 2025 and the transport sector's annual core inflation rate in both May and July 2025. The inflation rate data refers to the month of July 2025 and was released on Wednesday. The data provided refers to UK statistics.
[1] Office for National Statistics (ONS) - Inflation Rate Data [2] ONS - Contribution to Inflation Rise Data [3] ONS - Core Inflation Rate Data [4] ONS - Cost-of-Living Pressures Data
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