If you are investment planning in Cheshire, UK prices reportedly rose 3.6% in the year ending June 2025. The news is likely to concentrate minds at Threadneedle Street, where the Bank of England has been steadily cutting interest rates over the same period.
Inflation is tracked by the Office for National Statistics (ONS). Their Consumer Price Index (CPI) records fluctuations in the retail cost of hundreds of items such as food and fuel. In the latest figures, products such as yoga mats, pulled pork and virtual reality headsets were included for the first time this summer, while local newspaper ads and DVD rentals were removed. Updated ‘baskets of goods’ help economists more accurately gauge retail trends.
The Bank of England also considers ‘core inflation’ data. The Core CPI inflation figures nudged up to 3.7% up from 3.5%. This excludes food and energy prices, which are more susceptible to short-term volatility such as conflicts or economic shocks. This makes it easier to get a better idea of longer-term trends.
The overall inflation figures are still way below the 11.1% figure recorded in October 2022, which reflected the upward pressures on energy prices following the twin headache of the COVID and Ukraine crises. However, it seems UK supermarket shoppers are still feeling the pain, with food prices rising 4.5% in the year to June 2025. Industry analysts have attributed this to increased labour and energy costs, as well as raised costs for cocoa, coffee, meat and dairy.
Inflation is, of course, by no means unique to the UK. The Eurozone recorded a slightly lower 1.9% in May, while the US Federal Reserve recorded 2.7% inflation in June.
