(MENAFN) Consumer price inflation in Britain climbed to 3.6% in June, marking the steepest annual increase since January 2024, according to figures released Wednesday by the Office for National Statistics (ONS).

The June rate edged up from May’s 3.4%, driven largely by rising costs in motor fuel, airline and rail tickets, and food, the ONS reported.

Food and non-alcoholic beverage prices surged 4.5% compared to June 2024—a level not seen since February.

Core inflation, which strips out volatile components such as energy, food, alcohol, and tobacco, also accelerated, rising to 3.7% in June from 3.5% the previous month. Meanwhile, services inflation—a key barometer of domestic pricing pressure—held steady at 4.7%.

Separate data released earlier by the ONS showed that Britain's real gross domestic product contracted by 0.1% in May 2025, following a 0.3% decline in April, marking the second consecutive monthly downturn.

Despite stubborn inflation, the Bank of England opted in mid-June to maintain its benchmark interest rate at 4.25%, pointing to continued inflation ongoing inflationary pressures and increased global instability.

June’s inflation reading remains well above the Bank's 2% target. However, markets still anticipate an interest rate cut at the Bank's August meeting.

Economists forecast at least two more rate cuts before year-end, which could bring the central bank’s base rate down to around 3.75% by the close of 2025.

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