{"id":11516,"date":"2025-07-16T09:33:51","date_gmt":"2025-07-16T08:33:51","guid":{"rendered":"https:\/\/hamiltoncourtfx.com\/?p=11516"},"modified":"2025-07-16T09:33:53","modified_gmt":"2025-07-16T08:33:53","slug":"uk-inflation-rises-unexpectedly","status":"publish","type":"post","link":"https:\/\/hamiltoncourtfx.com\/es\/uk-inflation-rises-unexpectedly\/","title":{"rendered":"UK Inflation Rises Unexpectedly"},"content":{"rendered":"
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Word of the Week : Gordian Knot<\/strong><\/p>\n

A Gordian Knot<\/em> is a complex or seemingly unsolvable problem. Legend has it that Alexander the Great \u201csolved\u201d it by slicing through it with his sword. The Gordian effect<\/em> is a reminder to cut through complexity with clarity and courage.<\/p>\n<\/div>\n <\/div>\n <\/div>\n <\/div>\n<\/div>\n\n\n

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UK Inflation Rises Unexpectedly<\/h2>\n <\/div>\n
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Just days after the Governor of the Bank of England maintained that he \u201creally [does] believe the path is downward” on interest rates, this morning policy makers will be troubled by CPI coming in hotter than expected \u2013 in the latest sign that the central bank is not out of the woods when it comes to their fight against inflation.<\/p>\n

Here, data from the ONS indicated that headline inflation rose unexpectedly to 3.6% in June, representing a rise of 0.2 percentage points from the previous month\u2019s print. This marked the highest level since January 2024 and is a considerable rise from the recent lows of 1.7% recorded last September.<\/p>\n

The unexpected rise has seen money markets downwardly revise their rate cut expectations for the Bank of England\u2019s next MPC meeting on 7th<\/em> August, albeit marginally. For example, on Monday, money markets were implying that there as around a 94% chance of a 25bps cut, against an 88% chance today.<\/p>\n

One of the primary drivers was the transport sector, particularly motor fuel prices, which saw a notable increase likely reflecting supply side fears stemming from the Iran-Irael conflict. Air fares also rose by 7.9% between May and June 2025, the largest June rise since 2018. Another key contributor was the rise in goods inflation, with the annual rate for CPI goods climbing from 2.0% to 2.4%. This rise suggests that the cost of physical products\u2014such as clothing, household items, and vehicles could have been impacted by supply chain issues and increased shipping costs, in addition to some of the inflationary pressures facing businesses, including rises to National Insurance Contributions.<\/p>\n

When compared against some of the UK\u2019s counterparts, it\u2019s worth noting that the 3.6% headline \u00a0figure significantly outpaces the preliminary estimates for Germany (2.0%) and France (0.8%).<\/p>\n

When stripping out the volatile components of food and energy, Core CPI also accelerated, rising from 3.5% to 3.7%.<\/p>\n

On a monthly basis, CPI also rose by 0.3%, compared to just 0.1% in June 2024 and 0.2% in May, highlighting a notable acceleration in short-term price pressures.<\/p>\n

While the rate of CPI rose on both an annualised and monthly basis, it\u2019s worth noting that the consumer price index including owner-occupier housing costs, eased 0.3 percentage points to 6.4%.<\/p>\n

Given that this includes mortgages and council tax – which are excluded from the CPI \u2013 this is often considered a more comprehensive gauge of inflation. Nevertheless, though the pace of inflation eased on this index, its elevated level is indicative of the cost pressures still facing households.<\/p>\n

As money markets continue to consider the BOE\u2019s further monetary policy pathway, attention now turns to tomorrow\u2019s labour market figures from the UK, not least given Bailey\u2019s comments over the weekend where he stated that the Central Bank was ready to cut rates if the job market slows. Of course, this morning\u2019s figures make Bailey\u2019s predicament all the more difficult.<\/p>\n <\/div>\n <\/div>\n <\/div>\n<\/div>","protected":false},"excerpt":{"rendered":"

Just days after the Governor of the Bank of England maintained that he \u201creally [does] believe the path is downward” on interest rates…<\/p>\n","protected":false},"author":15,"featured_media":608,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"rp-language":[16],"class_list":["post-11516","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-morning-updates","rp-language-en_gb"],"_links":{"self":[{"href":"https:\/\/hamiltoncourtfx.com\/es\/wp-json\/wp\/v2\/posts\/11516","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/hamiltoncourtfx.com\/es\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/hamiltoncourtfx.com\/es\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/hamiltoncourtfx.com\/es\/wp-json\/wp\/v2\/users\/15"}],"replies":[{"embeddable":true,"href":"https:\/\/hamiltoncourtfx.com\/es\/wp-json\/wp\/v2\/comments?post=11516"}],"version-history":[{"count":2,"href":"https:\/\/hamiltoncourtfx.com\/es\/wp-json\/wp\/v2\/posts\/11516\/revisions"}],"predecessor-version":[{"id":11518,"href":"https:\/\/hamiltoncourtfx.com\/es\/wp-json\/wp\/v2\/posts\/11516\/revisions\/11518"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/hamiltoncourtfx.com\/es\/wp-json\/wp\/v2\/media\/608"}],"wp:attachment":[{"href":"https:\/\/hamiltoncourtfx.com\/es\/wp-json\/wp\/v2\/media?parent=11516"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/hamiltoncourtfx.com\/es\/wp-json\/wp\/v2\/categories?post=11516"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/hamiltoncourtfx.com\/es\/wp-json\/wp\/v2\/tags?post=11516"},{"taxonomy":"rp-language","embeddable":true,"href":"https:\/\/hamiltoncourtfx.com\/es\/wp-json\/wp\/v2\/rp-language?post=11516"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}