UK inflation accelerates in July as housing costs push up prices

UK consumer price inflation accelerated in July as higher housing and household services costs offset weaker transport inflation, while factory gate and input price pressures eased as oil prices fell.

The Office for National Statistics said on Wednesday that the consumer prices index rose 2.9% in the 12 months to July, accelerating from 2.6% in June and in line with the FXStreet-cited consensus.

The consumer prices index including owner occupiers' housing costs, the ONS's preferred measure of inflation, rose 3.1% annually in July, up from 2.8% in June but below FXStreet expectations of a 3.2% rise.

On a monthly basis, both CPIH and CPI rose 0.3% in July. CPI increased from a 0.1% monthly rise a year earlier, while CPIH compared with little change in July 2025.

The largest upward contributions to the annual inflation rates for both CPIH and CPI came from housing & household services and furniture. Transport provided the largest offsetting downward contribution.

Core CPI, which excludes energy, food, alcohol and tobacco, was unchanged at 2.6% in the year to July, ahead of FXStreet expectations of a 2.5% rise.

Goods inflation accelerated to 2.2% from 1.7%, while services inflation eased to 3.4% from 3.6%.

Core CPIH rose to 2.9% from 2.8%. Goods inflation increased to 2.2% from 1.7%, while services inflation was unchanged at 3.6%.

Separate figures from the ONS showed producer price inflation eased in July.

Producer input prices rose 4.9% annually, down from a revised 7.4% increase in June, and below the FXStreet-cited consensus of 6.6%.

Producer output, or factory gate, prices rose 3.1%, easing from 3.5%.

On a monthly basis, producer input prices fell 1.7%, while output prices edged up 0.2%.

The ONS said crude oil made the largest contribution to the slowdown in input price inflation, with prices falling 18% during the month. Refined petroleum products made the largest contribution to the slowdown in output price inflation after prices fell 2.9% month-on-month.

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