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UK Inflation Rises in July, GBP/USD tests 1.3500
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By Anya Sharma | LONDON – 2025/08/20 07:14:50
The headline Consumer Price Index (CPI) in the United Kingdom increased at an annual rate of 3.8% in July, according to data released Wednesday by the Office for National Statistics (ONS). This follows a 3.6% increase in June.
Market forecasts anticipated a 3.7% rise. The latest figure moves further away from the Bank of England’s (BoE) 2% inflation target.
The core CPI,which excludes volatile food and energy prices,also rose 3.8% year-over-year (YoY) in july, matching expectations and exceeding June’s 3.7% increase.
Inflation in the services sector climbed to 5% YoY in July, up from 4.7% the previous month.
On a monthly basis, UK CPI inflation slowed to 0.1% in July, down from 0.3% in June, but above the projected -0.1%.
Market Reaction
The UK CPI data lifted the Pound Sterling rebound, with GBP/USD up 0.04% higher on the day at 1.3496, as of writing.
The Pound sterling saw a boost following the UK CPI data, with GBP/USD trading up 0.04% to 1.3496.
Frequently Asked Questions
- What is CPI?
- CPI stands for Consumer Price Index, a measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care.
- Why is inflation important?
- Inflation affects the purchasing power of consumers and businesses. Central banks monitor inflation to maintain economic stability.
- What is the Bank of England’s inflation target?
- The Bank of England aims to maintain inflation at 2%.
