UK inflation rose by more than expected in July as demand for summer travel pushed up air fares and food prices continued to climb, according to official figures.
Consumer Prices Index (CPI) inflation increased to 3.8% in July, from 3.6% in June, the Office for National Statistics (ONS) said.
Most economists had been forecasting inflation to rise to 3.7%.
The Consumer Prices Index (CPI) rose by 3.8% in the 12 months to July 2025, up from 3.6% in the 12 months to June 2025.
— Office for National Statistics (ONS) (@ONS) August 20, 2025
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It means the headline rate remained at the highest level since January 2024, when it hit 4%.
The ONS said transport was the biggest factor driving up overall inflation last month, particularly due to a spike in flight prices as families booked trips during the school summer holidays.
Air fares soared by 30.2% between June and July, the biggest jump since the collection of monthly data began in 2001.
The average price of petrol rose by 2p per litre between June and July, and the average diesel price by 2.9p per litre over the period, the data showed.
Prices across UK restaurants and hotels also increased last month, largely driven by a jump in overnight hotel stays booked the night before.
Food and drink inflation rose to 4.9% in July, from 4.5% in June.
This marked the fourth month in a row that the annual rate had increased and remained at the highest level since February 2024.
Grant Fitzner, the ONS’s chief economist, said: “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 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.”
Chancellor Rachel Reeves acknowledged that there was “more to do to ease the cost of living” following the figures.
She 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.”
