Inflation Reaches 18-Month High
The Consumer Prices Index (CPI) has risen to 3.8% in the 12 months to July 2025, up from 3.6% in the 12 months to June. This increase has surpassed expectations and marks an 18-month high. As a result, experts are warning that the government needs to take responsibility for the rising cost of living.
What’s Behind the Increase?
The rise in inflation is largely attributed to business-led price increases, driven by the growing cost of hiring staff and the UK’s reliance on imports. Chris Barry, Director at London-based Thomas Legal, notes that "inflation rising and interest rates dropping is a dangerous cocktail" that is occurring due to a lack of economic growth.
Impact on Borrowers
The increasing inflation rate is likely to affect borrowers, particularly those on tracker or nearing the end of a fixed deal. Rohit Kohli, Director at Romsey-based The Mortgage Stop, advises that "anyone on a tracker or nearing the end of a fixed deal needs to take note" of the rising inflation figures. With forecasts pointing to 4% by year-end, the chance of further rate cuts has reduced significantly.
Government Response
The government is being criticized for its handling of the economy, with Labour being accused of being "completely out of its depth." Experts argue that the government’s policies are contributing to the rising inflation, economic stagnation, and cost of living crisis. The Labour party is being urged to "own this rise" and take responsibility for the increasing inflation rate.
Staying Informed
To stay up-to-date with the latest news and updates on the cost of living, you can join a dedicated WhatsApp community or sign up for a daily Money Saving Newsletter. These resources will provide you with the latest information on DWP and HMRC changes, benefits, payments, banks, bills, and shopping discounts.
Conclusion
In conclusion, the rising inflation rate is a significant concern for the UK economy and the cost of living. With the CPI reaching an 18-month high, it is essential for the government to take responsibility and implement effective policies to address the issue. As the situation continues to evolve, it is crucial for individuals to stay informed and take necessary steps to manage their finances and mitigate the impact of rising inflation.
