UK CPI inflation in July 2025 rose to 3.8%, which was higher than the 3.6% in June, and it was marginally higher than the 3.7% expected by financial market analysts. The recent rises were primarily driven by transport, including a sharp rise in air fares, as well as higher motor fuel costs, energy bills and private school fees.

The majority of the inflation rise compared with a year ago was from energy bills, which at this time in 2024 were falling sharply from a high base at the Summer 2023 peak. Current energy market pricing suggests that the contribution to year-on-year inflation from energy bills is likely to fade gradually. Services inflation, which the Bank of England looks at closely to see medium-term trends in UK CPI inflation, rose from 4.7% in June to 5.0% in July.

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