Core inflation remains 'stubborn' despite falling headline figure

The stagnant inflation raises concerns that prices will continue to rise

Elliot Gulliver-Needham
clock • 3 min read

Core inflation remained stagnant throughout July, raising fears that prices will continue to rise quickly, despite the headline figure falling to 6.8% over July.

AJ Bell head of financial analysis Danni Hewson noted that the introduction of the new energy price cap was "primarily responsible for the significant fall in the headline rate". The sharp fall in Ofgem's price cap to £2,075 on 1 July pushed the annual rate of inflation for housing, water, electricity, gas and other fuels to 6.8% in July, down from 12% in June and a peak of 26.7% in January. UK inflation remained 2.2 percentage points above the G20 average in July, but has reached its smallest spread in 11 months, after peaking at 4.4 percentage points in March. The falling price of e...

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