In a concerning update for UK consumers, inflation has surged to 3.6% in the year leading up to June, marking the sharpest rise in inflation since January 2024. The latest figures from the Office for National Statistics (ONS) reveal a notable increase from the 3.4% inflation rate recorded in May. This uptick is primarily attributed to higher food prices and a slower-than-expected decline in fuel costs compared to the same period last year.

The accelerated rise in prices could spell trouble for households, as the cost of everyday items becomes more burdensome. Shoppers are seeing their money stretch less and less, with essentials like food and petrol driving the inflationary pressure. The rate remains well above the Bank of England’s target of 2%, although economists anticipate a potential interest rate cut in the upcoming rate-setting meeting, as borrowing costs continue to play a crucial role in controlling inflation.

Richard Heys, the acting chief economist at the ONS, noted that “Inflation ticked up in June, driven mainly by motor fuel prices which fell only slightly, compared with a much larger decrease at this time last year.” He further explained that food prices have risen for the third consecutive month, reaching their highest annual rate since February 2024, although they remain significantly below the peaks seen two years ago.

In terms of wages, the situation appears somewhat brighter. Over the past year, average wages have risen by 5.2%, suggesting that, for some, the sting of rising prices may be somewhat mitigated. However, the majority of consumers remain affected by the escalating costs of daily staples, with food prices climbing at a rate of 4.5%, the steepest increase since February 2024.

Chancellor Rachel Reeves acknowledged the financial strain on households, stating that the government remains committed to alleviating the burden on consumers. “We know people are still struggling with the cost of living,” she said, while emphasising the government’s plans to put “more money into people’s pockets.”

As inflation continues to outpace wage growth, and with the price of essential goods showing no signs of retreat, it remains to be seen how the Bank of England will respond. Many are closely watching the upcoming policy decisions, especially as price rises persist, leaving consumers grappling with the real impact on their wallets.