UK consumer price growth accelerated to 3.8% in July from 3.6% the previous month, according to Office for National Statistics figures published Wednesday. The result exceeded market expectations of 3.7% and marked the highest annual reading since January 2024. Prices rose 0.1% on the month, while core inflation—excluding energy, food, alcohol and tobacco—also printed at 3.8%. Services inflation picked up to 5.0% and food costs climbed 4.9%. The ONS said the upside surprise was driven largely by sharply higher airfares, hotel rates and staff-canteen charges during the school-holiday period. The hotter data sparked a sell-off in government debt, pushing gilt yields to their highest level in almost three months, and prompted traders to pare back expectations for further monetary easing. Interest-rate futures now assign roughly a 42% chance of another Bank of England cut by December, down from about 50% before the release. The figures land just a week after the Bank of England trimmed its policy rate by 25 basis points to 4.0% in a close 5-4 vote, and they complicate the central bank’s stated intention to continue a “gradual and careful” easing cycle. Officials have projected headline inflation will crest near 4% in September before retreating toward the 2% target in 2026, but Wednesday’s print suggests price pressures remain stubborn. Businesses are already passing on cost increases: trade groups report that 79% of hospitality firms have raised prices amid higher wages, energy bills and other budget pressures—factors likely to keep consumer prices elevated in the near term.