PwC comments on July 2024 CPI figures

Commenting on the Office of National Statistics consumer price index for June 2024, Jake Finney, Economist at PwC, comments:

“Headline inflation remained flat at 2.0% in June, broadly in line with consensus expectations. This means that the UK is still one of the only advanced economies where inflation is on target, after being a poor-performing outlier for much of the past few years.

“However, there are still pockets of strength in the underlying inflation components. Services inflation remains much higher (5.7%) than the last period inflation was at target in July 2021 (1.6%), having flatlined in June. Meanwhile, our modeling indicates that energy inflation has likely bottomed out, with the household energy price cap potentially set to increase by 7% in October.

“Our modeling indicates that these divergent inflation pressures will see headline inflation bounce around the 2.0% target throughout the remainder of 2024. Though we still expect the Bank of England will have seen enough progress on inflation to cut rates in their next meeting on 1 August or in September.”