UK Inflation Eases to 2.8% in June, But Prices Keep Climbing

UK Prime Minister Andy Burnham is on a nationwide tour to listen to the 'financial concerns' of the people, as the country grapples with a rising cost of living. The Bank of England expects inflation to climb further in the second half of the year as fallout from the US-Israel war on Iran pushes up energy prices and household bills. That means prices are still rising, but more slowly than earlier in the year.

In practical terms, if something cost 100 pounds (about $135) in June last year, that same item now costs 102.80 pounds ($138.65). Before the US and Israel attacked Iran on February 28, the Bank of England had forecast that inflation as measured by the Consumer Prices Index (CPI) would fall from 3.4 percent in 2025 to 2.3 percent in 2026. Instead, inflation was again 3.4 percent in March this year, largely driven by higher fuel and heating costs. The closure of the Strait of Hormuz, a route for about one-fifth of the world's oil and liquefied natural gas (LNG) supplies, has pushed up the cost of petrol, transport, food and other goods.