The UK's annual inflation rate accelerated to 2.9% in July from 2.6% in June, exceeding the Bank of England's 2% target, according to data released by the Office for National Statistics on Wednesday.
The increase, which outpaced the 2.6% forecast by analysts, was primarily driven by higher costs in housing and household services. On a monthly basis, consumer prices rose 0.3%, matching expectations and reflecting similar pressures from household maintenance expenses.
The core inflation rate, which excludes volatile energy and food prices, held steady at 2.6% year-on-year, defying expectations of a decline to 2.5%. This stability suggests persistent underlying inflationary pressures beyond the most volatile components.
The latest figures underscore the challenges facing the Bank of England as it seeks to balance inflation control with economic growth. Policymakers have maintained a cautious stance, with the central bank's benchmark interest rate remaining elevated to curb persistent price pressures.
