Economic research consultancy founded by Ian Shepherdson
Inflation has moved higher in August, driven by petrol, diesel and airfares, according to ONS data. The figures have heightened expectations for the Bank of England’s next move as energy-price caps are updated and aviation costs rise.
Inflation has edged up to 3.1% in August, driven by higher fuel prices and long-haul air travel, according to the ONS. Economists forecast further increases in the coming months, with energy costs and the global outlook shaping households’ budgets ahead of autumn measures.
July saw only modest 0.1% month-on-month growth in UK house prices, with annual growth slowing to 1.8%. Affordability remains a challenge as mortgage rates rise amid geopolitical tensions. Northern Ireland leads price gains while the south and London lag. The Bank of England cautions inflation pressures could rise if the Iran conflict persists.
GDP has expanded by 0.4% in Q2, driven by services and a hot-weather World Cup boost. Yet growth remains delicate amid high energy prices and geopolitical tensions, with Treasury modelling warning of a slower 2027 if Iran-hostilities persist.
Economists have forecast July GDP to be flat with June, after growth in June. July’s annual output is 1.6% higher than a year earlier, the fastest since February 2025, with services strength offsetting declines in production and construction. The Bank of England sees growth this year near 1.1% as inflation remains a focus.