UK inflation rises by more than expected as summer travel bumps up air fares

UK inflation rose by more than expected in July as demand for summer travel pushed up air fares and food prices continued to climb, according to official figures.

Consumer Prices Index (CPI) inflation increased to 3.8% in July, from 3.6% in June, the Office for National Statistics (ONS) said.

Most economists had been forecasting inflation to rise to 3.7%.

It means the headline rate remained at the highest level since January 2024, when it hit 4%.

The ONS said the school summer holidays helped bump up travel costs last month, which helped drive up inflation across the UK.

Grant Fitzner, the ONS’s chief economist, said: “The main driver was a hefty increase in air fares, the largest July rise since collection of air fares changed from quarterly to monthly in 2001.

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

“The price of petrol and diesel also increased this month, compared with a drop this time last year.

“Food price inflation continues to climb – with items such as coffee, fresh orange juice, meat and chocolate seeing the biggest rises.”

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Inflation has jumped again – rising 3.8% in the year to July, the steepest increase since January.

For households already stretched, that means everyday essentials are once more taking a bigger bite out of pay packets and the squeeze falls heaviest on lower-income families.

Food prices are leading the charge, up 4.9% on last year.

Shoppers are feeling it most in staples like beef, sugar, chocolate, instant coffee and fruit juice.

Fuel costs are also up, with petrol and diesel almost 3p a litre more expensive than a year ago.

That doesn’t just hurt drivers – it filters through into transport costs for businesses, nudging up prices across the board.

Yes, gas and electricity bills dipped slightly in July, but most households have seen those savings quickly cancelled out by rising costs elsewhere.

A key target for Sir Kier Starmer’s government was to offer relief on the cost of living, today’s figures underline a stubborn reality: the pressure on working families isn’t easing – it’s mounting.