UK inflation rose to 3.6% in June, the highest since January 2024, beating expectations of no change from 3.4%.

Food prices jumped 4.4%, led by beef, butter, and chocolate, as retailers blamed recent tax hikes and minimum wage increases.

The Labour government’s tax changes from the last budget are under criticism for raising business costs and pushing up consumer prices.

Bank of England may still cut rates on 7th August, but traders have reduced bets on further cuts as inflation remains sticky, especially in services at 4.7%.

Businesses are slowing hiring and raising prices, while households continue to feel cost-of-living pressures, according to Chancellor Rachel Reeves.

More tax hikes could be on the way this autumn, despite warnings of stagflation risks and a near-record tax burden that could hinder growth.

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