UK consumer prices rose 3.8% from a year earlier in July, up from 3.6% in June and the fastest pace since January 2024, the Office for National Statistics said. The increase topped economists’ expectations of 3.7%. On a monthly basis, inflation edged up 0.1%, slowing sharply from June’s 0.3%. Core inflation, which strips out food and energy, matched the headline rate at 3.8%. Price pressures were broad-based. Services inflation accelerated to 5.0%, while food, transport and hospitality costs remained elevated. The figures widen the gap between UK and euro-area inflation to 1.8 percentage points, the largest divergence in almost two years, underscoring Britain’s comparatively stubborn price momentum. The data complicate the Bank of England’s newly-begun easing cycle. Policymakers cut the Bank Rate to 4.0% earlier this month by a narrow 5–4 margin and had projected headline inflation to hit 4% in September before gradually declining. Following Wednesday’s release, interest-rate futures show investors assign less than a 50% probability to another cut this year, reflecting doubts that inflation will return quickly to the BoE’s 2% target. Underlying price resilience is also evident in the housing market, where official statistics show average house prices rising 3.7% in June. With wage growth still around 5% and services costs accelerating, economists say the central bank may have limited scope to loosen policy further until clearer disinflation emerges.