'It will hit hard' | UK inflation rate rises - what HR needs to know about its impact on employees

The UK's inflation rate has climbed for the first time this year, according to newly released official data. Over the 12 months leading to July, prices increased by 2.2%, just above the Bank of England's 2% target, which had held steady since May.

This rise was broadly anticipated, largely due to gas and electricity prices decreasing less significantly than they did a year earlier. Nevertheless, the increase was smaller than what many economists had predicted.

The latest data indicates that prices across the UK are now rising at a faster rate than in previous months, though still more slowly than in 2022 and 2023, when households faced particularly steep hikes in energy and food costs.

The Bank of England forecasts that inflation, which measures the speed at which prices grow, could reach 2.75% in the coming months before dipping below 2% next year.