16 July 2025
If you are covering the latest UK inflation rate, please find below a comment from Lindsay James, investment strategist at Quilter:
“Despite last night’s Mansion House speech and the desire to kickstart growth in the economy, Labour is left waking up to headlines of inflation rising again. The Consumer Price Index hit 3.6% in June, up from 3.4% the month prior, and is showing little sign of coming back down to the 2% target soon. This ramps up pressure on the government to find some wins when it comes to economic growth and making the country feel like they are better off under this administration.
“It seems we are now seeing the effects of the rise in employer national insurance contributions feeding through into prices, along with increased shipping costs hitting too. Groceries, for example, have been higher in June as a result of those increased costs and a poor harvest, the third consecutive rise. Other sectors too are also seeing an increase in prices as we hit the summer months. Fuel prices aren’t falling as fast as they did last year, while clothing prices have also risen. Ultimately, consumers are going to be feeling the pinch once again when it comes to the cost of living.
“It appears that these pressures are also going to continue into the second half of the year, making any significant rate cuts from the Bank of England difficult to envisage. That said, with the labour market slowing and economic growth proving especially elusive in recent months, it might just have no choice but to bite the bullet and cut rates sooner rather than later.
“We also saw yesterday inflation in the US begin to accelerate, potentially as a result of the tariff uncertainty that has come to dominate markets of late. The UK’s ‘trade deal’ with the US appears to have been anything but that, and any renegotiation is likely to impact prices further. While the geopolitical risks have subsided for now, the economic ones continue to blight. The challenge to get inflation back down and staying at 2% is looking increasingly fraught with danger.”
