Business Today | The Guardian

Support the Guardian

Fund independent journalism

Live
UK inflation stays at 2%, defying forecasts of a further dip

Economists talk of Taylor Swift effect on prices, but say that Bank of England is likely to be more worried about sticky services inflation due to higher wages

Headlines

Inflation
UK drive to cut inflation stalls as rate remains at 2% for second month in a row

IMF
UK interest rates will stay high unless service sector inflation falls

Manufacturing
Titanic shipyard owner Harland & Wolff awaits news of funding lifeline

Elon Musk
Tycoon says X and SpaceX will move from California to Texas

Water
Southern boss handed £183,000 bonus despite huge rise in bills

Retail
Falling inflation, football and fake tan fuel UK spending

Technology
Microsoft deal with AI startup faces UK competition probe

Ocado
Shares jump as it narrows losses and boosts technology business

Today's agenda

It’s inflation day in the UK today. The headline annual inflation rate stayed at 2% in June, unchanged from May, according to the Office for National Statistics. Analysts had expected a further dip to 1.9%. Inflation was last lower than this in April 2021, when it stood at 1.5%.

On a monthly basis, the consumer prices index (CPI) rose by 0.1% in June from May. The largest upward contribution to inflation came from restaurants and hotels, where prices of hotels rose more than a year ago; the largest downward contribution came from clothing and footwear, with prices of garments falling this year after having risen a year ago.

The core rate of inflation, which strips out energy, food, alcohol and tobacco, stayed at 3.5%. The inflation figures will be the last the Bank of England sees before it decides on 1 August whether to cut rates from their level of 5.25%.

Financial markets see a near-50% chance of a rate cut at the BoE’s next meeting on 1 August. The pound rose slightly on the higher-than-expected inflation data, and is trading at $1.2977. It has gained nearly 2% against the dollar this year.

Taylor Swift may have put pressure on UK inflation as fans splashed out on costly concert tickets, hotels and meals out. The American singer toured Edinburgh, Liverpool, Cardiff and London in June. However, economists say that the BoE is likely to be more worried about sticky services inflation, which stayed at an annual rate of 5.7% in June.

Luke Bartholomew, deputy chief economist at the investment firm abrdn, said: "Today’s inflation report will keep the Bank of England’s August rate decision on a knife edge. The strength of hotel price growth is suggestive of a so-called Taylor Swift effect on prices, but policymakers will almost certainly look through this kind of dynamic.

"More fundamentally, the ongoing stickiness of services inflation will leave the Bank wondering how long inflation will stay at the 2% target once favourable base effects have passed and domestic price pressures start to drive headline inflation again. Tomorrow’s wage data will provide more clues about these price pressures, and the Bank will hope to see a further moderation in wage growth. For now, we continue to expect a rate cut in August, but this will require the upcoming data to cooperate."

The agenda
• 10am BST: Eurozone inflation for June (forecast: 2.5%)
• 1.30pm BST: US Building permits for June

We’ll be tracking all the main events throughout the day ...

Opinion

World needs economic stability, but if Trump wins we’re unlikely to get it

Larry Elliott

Media

Strictly Come Dancing
Professionals will no longer be left alone with contestants

Disney
Hackers claim data theft in protest against AI-generated artwork

Spotlight

Magic acts to Goldman Sachs and beyond …
The US finance whiz helping kickstart UK growth

Tracy Blackwell, boss of the Pension Insurance Corporation, has worked her way from up Baskin-Robbins and survived a shipwreck disaster (for her possessions), to lead a company set to work closely with the new chancellor

Feast: Our new cooking app is now available on Android

Discover thousands of easy and inspiring recipes from our brilliant cooks, to help you make a feast out of anything. Brimming full of ideas and smart features, it will make everyday cooking easier and more fun.

Start your delicious journey with a 14-day free trial. Feast is available now on both Android and iOS devices.

Unlock free trial

Popular on business

UK ready to build ‘closer, more mature’ trade links with EU

Why everyone should have ‘zero days’ and do the worst job first

‘I’ve got a case’: the UK workers fighting their boss over return to office

Every water firm in England and Wales under investigation over sewage spills

Burberry must end emphasis on shock factor and focus on being loved again

Get in touch

If you have any questions or comments about any of our newsletters please email newsletters@theguardian.com

… there is a good reason why not to support the Guardian

Not everyone can afford to pay for news right now. That is why we keep our journalism open for everyone to read. If this is you, please continue to read for free.

But if you are able to, then there are three good reasons to support us today.

Our quality, investigative journalism is a powerful force for scrutiny at a time when the rich and powerful are getting away with more and more

We are independent and have no billionaire owner telling us what to report, so your money directly powers our reporting

It doesn’t cost much, and takes less time than it took to read this message

Help power the Guardian’s journalism in this crucial year of news, whether with a small sum or a larger one. If you can, please support us on a monthly basis . It takes less than a minute to set up, and you can rest assured that you're making a big impact every single month in support of open, independent journalism. Thank you.

Support us

Manage your emails | Unsubscribe | Trouble viewing?

You are receiving this email because you are a subscriber to Business Today. Guardian News & Media Limited - a member of Guardian Media Group PLC. Registered Office: Kings Place, 90 York Way, London, N1 9GU. Registered in England No. 908396