Deutsche Bank analyst Sanjeev Raja warned UK inflation could rise further after
headline CPI increased to 2.9% in July from 2.6% in June. He said the Bank of
England’s core services indicators were revised higher across the board,
highlighting renewed services price momentum, while energy inflation remains
volatile amid Middle East geopolitical uncertainty. Food inflation is at its
lowest since end-2021 and services growth is at a three-month low, but Raja
cautioned this may be temporary and said there are strong reasons to expect food
prices to trend higher in 2027.
