Inflation LIVE: CPI soars to 3.8% in fresh headache for Rachel Reeves

The body that represents the UK's food and drinks manufacturers says the new inflation figures show the industry is being "squeezed on all sides".

The 12-month inflation rate for food and non-alcoholic beverages was 4.9% in July 2025, up from 4.5% in the 12 months to June, according to the Office for National Statistics (ONS).

This was the fourth consecutive increase in the annual rate and the highest recorded since February 2024, however the ONS said this remains "well below" the peak seen in early 2023.

Jim Bligh, from the Food and Drink Federation (FDF), said: "Energy prices remain high, and the cost of some key ingredients has surged in recent years. Cocoa prices are at a 45-year high, and both olive oil and butter prices have doubled since 2020.

“With high commodity prices, the new £1.4 billion packaging tax, and increased National Insurance costs, it’s no surprise that many food and drink manufacturers have seen their costs increase by 10% or more this year.

“Manufacturers have absorbed as many of these costs as possible, but consumers will still see higher prices at the till.

"We expect that high food and drink inflation will persist through the year, so any fresh costs for businesses in the Autumn Budget will inevitably put yet more pressure on shoppers' pockets.”

Shadow Chancellor Mel Stride has responded to the new inflation figures, accusing Chancellor Rachel Reeves of "economic mismanagement".

He said families are "paying the price" for Ms Reeves' decisions.

Mr Stride said: "Inflation up yet again.

"Labour’s choices to tax jobs and ramp up borrowing are pushing up costs and stoking inflation. And the Chancellor is gearing up to do it all over again in the autumn.

"Families are paying the price for Rachel Reeves’ economic mismanagement."

Rachel Reeves has been reacting to the ONS figures which show UK inflation continued to rise last month.

She said there was "more to do to ease the cost of living”.

In a statement, the Chancellor said: “We have taken the decisions needed to stabilise the public finances, and we’re a long way from the double-digit inflation we saw under the previous government, but there’s more to do to ease the cost of living.

“That’s why we’ve raised the minimum wage, extended the £3 bus fare cap, expanded free school meals to over half a million more children and are rolling out free breakfast clubs for every child in the country.

“Through our plan for change we’re going further and faster to put more money in people’s pockets.”

Fuel and food prices increased in July, according to the ONS.

The ONS said the 12-month inflation rate for food and non-alcoholic beverages was 4.9% in July 2025, up from 4.5% in the 12 months to June.

This was the fourth consecutive increase in the annual rate and the highest recorded since February 2024, although still "well below" the peak seen in early 2023.

Grant Fitzner, the ONS’s chief economist, said: “The price of petrol and diesel also increased this month, compared with a drop this time last year.

“Food price inflation continues to climb – with items such as coffee, fresh orange juice, meat and chocolate seeing the biggest rises.”

UK inflation is at its highest annual rate since January 2024, according to the Office for National Statistics' chief economist.

Grant Fitzner confirmed this as figures show the Consumer Prices Index (CPI) inflation increased to 3.8% in July, from 3.6% in June.

He said: "Inflation rose again this month to its highest annual rate since the beginning of last year.

"The main driver was a hefty increase in air fares, the largest July rise since collection of air fares changed from quarterly to monthly in 2001.

"This increase was likely due to the timing of this year's school holidays."

The ONS says rising transport costs, in particular air fares, was the main driver of inflation.

ONS chief economist Grant Fitzner said: "This increase was likely due to the timing of this year’s school holidays."

UK inflation rose more than expected last month to 3.8%, the Office for National Statistics (ONS) said.

The rate of Consumer Prices Index (CPI) was up from 3.6% in June.

Economists widely expected inflation to rise to 3.7% in July.

We are expecting to get the inflation rate for July imminently but while we wait, here's a reminder for what the Office for National Statistics (ONS) said for the month before.

The rate of Consumer Prices Index (CPI) inflation was recorded at 3.6% in June.

For July, it is widely expected to increase to 3.7%.

Economists say school holidays have boosted travel costs, while grocery prices remain elevated.

Some experts are also putting a rise in accommodation prices in July down to an "Oasis bump" as a result of the band's reunion tour.

The Bank of England says a "low and stable" inflation rate is important for a healthy economy.

It said for most of the last 20 years, the rate has been around 2%.

The central bank defines inflation as when prices rise, with how quickly they do so being the rate of inflation.

The Bank of England is forecasting that inflation will increase further this year and peak at about 4% in September, before easing throughout the next two years.

Accelerating food and energy prices have been key drivers in the uptick in inflation, it said.

Supermarket inflation fell slightly this month, according to latest figures.

However, it remains “well past the point at which price rises really start to bite”, according to Fraser McKevitt, head of retail and consumer insight at market reseach firm Worldpanel by Numerator.

Grocery prices were 5% higher than a year ago in the four weeks to August 10, the research found.

However, this was down from July’s 5.2%, which represented a rise from inflation of 4.7% a month earlier and marked the highest level since January 2024.

Mr McKevitt added: “What people pay for their supermarket shopping often impacts their spending across other parts of the high street too, including their eating and drinking habits out of the home.”

The Office for National Statistics (ONS) will publish the latest inflation dataset at 7am this morning (Wednesday).

We will be bringing you all the latest news and reaction to the inflation rate throughout the morning.

Increased ingredients, labour and regulatory costs have partly been behind a rise in food prices this year.

Annual food price inflation increased for the third month in a row in June, hitting the highest rate since February 2024.

Victoria Scholar, head of investment for Interactive Investor, said there were “particular worries about domestic food price inflation".

She added "uncertainty" surrounding US President Donald Trump's tariffs could "push up prices".

The Bank of England has said rising food and energy prices have been key drivers in the uptick in inflation.

It is forecasting inflation will increase further this year and peak at about 4% in September, before easing throughout the next two years.

Also being announced by the Office for National Statistics (ONS) on Wednesday is last month's Retail Prices Index (RPI) measure of inflation.

The Government has not confirmed how it will determine the cap on regulated train fare rises in England in 2026, but this year’s 4.6% hike was one percentage point above RPI in July 2024.

Banking group Investec has forecast this year’s July RPI figure will be 4.5%, which means fares could jump by 5.5%.

Pressure group Railfuture told the PA news agency “it would be outrageous” if fares rose by that much.

The school summer holidays are believed to have pushed up travel costs.

It's likely to have seen airfare rise considerably, with airlines typically bumping up prices in July amid stronger demand from families.

Analysts for Pantheon Macroeconomics forecast that airfares could surge by 17.1% between June and July, while rail costs and package holidays are also set to have jumped amid the spike in summer travel.

Some experts say an "Oasis bump" could have contributed to higher acommodation prices last month.

The band's highly-anticipated reunion tour has been taking places in cities across the UK this summer.

The band's concerts in cities is likely to have driven greater demand for hotel rooms.

Accommodation prices could rise by as much as 9% in July, compared with June, “with the Oasis concerts having a strong impact on Manchester prices alone”, according to Sanjay Raja, senior economist for Deutsche Bank.

He is predicting headline UK inflation will have risen to 3.8% in July.

Prices in the UK are set to have risen faster last month, according to economists.

The rate of Consumer Prices Index (CPI) inflation is widely expected to have increased to 3.7% in July, from the 3.6% recorded in June.

School holidays boosted travel costs and grocery bills are believed to have remained elevated.

Good morning, we're up bright and early to bring you the latest news as the UK's ONS is set to confirm the latest rate of inflation at 7am.