The Bank of England currently expects inflation to hit 4% in September, the all-important month for pensioners. Wage growth is currently slightly higher than this at 4.6% (including bonuses), although it could shift slightly in next month's report.

UK inflation rose unexpectedly in July, led by energy and airfares, but core pressures remain nuanced. Markets signal BoE may pause in September.

By contrast, Eurozone inflation held steady in the same month at 2 per cent, according to separate data from Eurostat, the EU’s statistics agency, with a reading of just 0.9 per cent in France. The 1.8 percentage point gap between UK and euro area inflation is the widest since September 2023.

Food price inflation also continues to climb, with items such as coffee, fresh orange juice, meat and chocolate seeing the biggest rises. | ITV National News

The chancellor will have a particular eye on food inflation because people are especially sensitive to grocery price rises. At 4.9%, it’s the highest since February 2024, driven

The collection window for last month’s figures was “on or around 15 July”, while school summer holidays in England began on 23 July (eight days later) this year. Last year, collection was “on or around 9 July”, while schools broke up on 25 July (sixteen days later).

UK inflation rose more than expected to 3.8 per cent in July, adding to concerns the Bank of England could put off another interest rate cut in September.

The U.K.'s annual inflation rate hit a hotter-than-expected 3.8%in July, according to data released by the Office for National Statistics (ONS) on Wednesday.