UK Inflation at 18 month high as food, transport costs soar

UK inflation reached an 18-month high, rising to 3.8% in July from 3.6% in June. This increase was driven by soaring food, transport costs, and the largest jump in airfares in 24 years due to summer holidays. Services inflation also climbed to 5%, surpassing predictions.

The Bank of England anticipates inflation will peak at 4% in September but may fall afterward. Economists warn of potential persistent inflation, prompting concerns among policymakers about rapid interest rate cuts. Food prices rose 4.9% year-on-year, with significant impacts from beef, chocolate, orange juice, and coffee.

Critics blame recent tax increases for worsening living standards amid inflation.