Inflation in the UK went up more than expected in June, reaching its highest level in 18 months. This has added more pressure on the new government led by Prime Minister Keir Starmer.
Also See:Â Italy Warns of Export Losses Due to US Tariffs, Weak Dollar
According to the Office for National Statistics (ONS), the Consumer Prices Index (CPI) rose to 3.6% in June, up from 3.4% in May. Experts had predicted it would stay the same, so this increase came as a surprise.
Read more:Â Trade Deal: India Cautious About Trump’s New Trade Tariffs, Waiting to See Impact
The main reasons for the rise are the high prices of fuel and food. Fuel prices didn’t drop as much as they did last year, and food prices have now increased for the third month in a row, reaching their fastest rise since February.
This news comes after another setback — the UK economy shrank for the second month in a row in May, raising concerns about slow economic growth. On top of that, the threat of new tariffs from the US is creating more uncertainty.
Chancellor Rachel Reeves admitted that many families are still struggling with the cost of living and said the government needs to do more to help.
Despite the rise in inflation, some experts believe the Bank of England might still cut interest rates in August because the overall economy is weak.
Ruth Gregory, a leading economist, said the surprise increase in inflation may not stop the Bank from making a small rate cut of 0.25%, but it might slow down how quickly they lower rates in the future.
