UK CPI Reaches 2.9% as Goods Inflation Accelerates

The UK's Consumer Price Index (CPI) rose to 2.9% in July, matching consensus expectations, according to the latest data from Action Forex.

Compared to the same period last year, prices increased by 0.3%, up from 0.1% in July 2025. Core CPI remained steady at 2.6%, slightly above the expected decline to 2.5%. The inflation composition was mixed, with goods inflation accelerating from 1.7% to 2.2%, while services inflation eased from 3.6% to 3.4%.

The largest upward contribution came from housing and household services, which saw annual inflation jump from 1.2% to 4.6%. Health inflation also strengthened from 2.5% to 3.7%, while clothing and footwear returned to positive annual inflation after a year of negative growth.

However, some categories cooled, including food inflation, which eased from 1.7% to 1.3%, and transport inflation, which slowed sharply from 5.7% to 3.6%. The overall picture suggests that while headline inflation is moving higher, underlying pressure remains more balanced than the 2.9% headline rate alone would suggest.