The inflation rate across the United Kingdom (U.K.) remained unchanged at 2% in June, according to data from the Office for National Statistics.
The June reading was slightly ahead of the 1.9% consensus expectation of economists and remains at the Bank of England’s target for a 2% annualized inflation rate.
Core inflation, which excludes volatile food, energy, alcohol and tobacco prices, stood at 3.5% in June, also unchanged from the previous month of May.
Higher restaurant and hotel prices were the biggest contributors to inflation in June, while clothing and footwear exerted downward pressure on consumer prices.
Consumers are increasing their spending on leisure activities over the summer months, including on concerts as musicians such as Taylor Swift and Sting tour the U.K., said the Office for National Statistics.
Investors have been expecting an interest rate cut as soon as this August as inflation cools across the U.K.
However, the Bank of England continues to downplay the timing of a rate cut, saying most recently that there continues to be “uncomfortable strength” in wage growth.
The British central bank’s key interest rate has been at a 16-year high of 5.25% since August 2023.
