The consumer price index (CPI), which measures the cost of goods and services, has increased to 3.6% in the past year, up from 3.4% for the 12-month period ending in May. This is still higher than the Bank of England target of 2%.
CPIH, which includes housing costs for owner-occupiers, rose from 4.0% to 4.1% over the 12-month period ending June 2025.
According to the Office for National Statistics, the Retail Prices Index (RPI), a measure of inflation that is used by unions when negotiating pay, has risen from 4.3% in may to 4.4%.
The CPI inflation rate was expected to remain at 3.4%, or even rise to 3.5%. Rachel Reeves said that she knew working people “still struggle with the cost-of-living” and acknowledged there was more to be done.
Brightmine’s median wage award for the year ending April was surpassed by figures for all three measures of inflation. The next set of data on pay will be published next week. However, the 3.0% rate has been in place since December.
Ben Harrison, director at Lancaster University’s Work Foundation, stated: “Inflation is up to 3.6% for the year, and the rising price of food will be a bad thing for workers with low incomes. One in six workers (17%) struggle to pay their monthly bills. Despite a sustained period of pay increases, only 50% of workers believe that wage increases keep up with cost of living.
These trends are pushing an unprecedented number of people to take on second jobs, often with precarious wages and unpredictable hours, to try to get by.
After a year, the government must focus on factors that are causing many of the day-to-day costs to be so high. These include a broken housing industry, inadequate water and energy supply, and childcare.
Martin Sartorius, principal economist for the CBI, said: “June’s stronger-than-expected inflation print will raise concerns that recent price pressures – driven by higher household energy prices and the passthrough of increased employment costs – could potentially re-entrench inflation in the economy.”
Paul Nowak, general secretary of the TUC, said that households are still suffering from higher prices. Many workers struggle to pay their rent, fuel, water and energy bills.
“The global economic uncertainty is not going away.” The workers shouldn’t be taking the brunt of this uncertainty. It’s high time that the Bank of England cut interest rates by 0.5%. This will relieve pressure on households and put more money in people’s pocket. It will also help families get on their feet.
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