In July, UK inflation surpassed the Bank of England's 2% target, reaching 2.2%.

• In July, U.K. inflation was 2.2%, slightly below forecasts but above the Bank of England's 2% target, as indicated by data from the Office for National Statistics.
• Headline inflation had previously come in at 2% in May and June.

In July, U.K. inflation was 2.2%, slightly below expectations but above the Bank of England's 2% target, as shown by data from the Office for National Statistics.

Reuters polled economists who predicted the headline consumer price index (CPI) would be 2.3%.

In May and June, the inflation rate was 2%, which matched the Bank of England's target rate.

The Office for National Statistics attributed the increase in housing and household services to a decrease in the rate of increase of gas and electricity prices compared to the previous year.

The core-CPI, which does not include food, energy, alcohol, and tobacco prices, was 3.3% in July, lower than the 3.5% forecast for July, according to the statistics office.

The Bank of England closely monitors inflation, which decreased from 5.7% in June to 5.2% in July.

Since the Bank of England cut interest rates for the first time in over four years, the key bank rate is now 5%. Prior to this, it had been held at a 16-year high of 5.25% since August 2023.

The BOE predicts that CPI will rise in the second half of 2024, as stated in its Monetary Policy Report released at the beginning of the month.

The BOE's Monetary Policy Committee has three scheduled meetings in 2024, but uncertainty persists about when the central bank will cut rates again and whether another cut will occur this year.

According to LSEG data, before the release of Wednesday's inflation data, markets predicted a 64% chance of the BOE keeping rates unchanged in September and a 79% chance of another rate cut in November.