Inflation stable staying at 2%

The Office of National Statistics has released the latest inflation figures for June, and the good news is that the Consumer Prices Index (CPI) has remained steady at 2.0%.

The biggest upward push to inflation came from restaurants and hotels, with hotel prices seeing a significant year-over-year increase. Interestingly, Taylor Swift’s Eras tour in the UK may have influenced this rise.

Conversely, the largest downward pressure on inflation came from clothing and footwear, as the prices of garments have fallen since last year.

Attention now turns to how this stability may influence interest rate policies. The Bank of England is set to meet and discuss this on August 1st.

While it is reassuring that the headline inflation rate has stayed at 2%, economists are concerned about persistent underlying inflationary pressures, particularly in the services sector, which make a rate cut less likely. Bloomberg reports that financial markets have reduced the likelihood of a rate cut in August from 50% to 25% following the news of the unchanged inflation figures.

Anecdotally, we are seeing that many clients in the services sector are struggling to find new work, with some of their regular customers looking to cut costs and reduce spending. Collecting payments has also become an issue for some businesses.

GET IN TOUCH WITH OUR WIMBLEDON ACCOUNTANTS for expert advice. As experienced business advisers, we can assist you with renegotiating finance, maximizing the intelligence from your financial information, or providing tax advice to minimize your tax burden. Why not give us a call and see how we can help you?

For more details, see: ONS Consumer Price Inflation

---

Feel free to contact our Wimbledon accountants to discuss how these inflation figures and potential interest rate changes could impact your business.

4o