The rate of Consumer Prices Index (CPI) inflation is expected to have come in at 2.8%, according to a consensus of analysts.
Private school fees and airfares are expected to drive an increase in inflation, with the Consumer Prices Index (CPI) inflation rate anticipated to reach 2.8%. Higher private school fees, resulting from the end of VAT exemptions for private schools, and seasonal airfare increases are key contributors. Economists note uncertainty around the extent of school fee hikes, with some estimating a significant month-on-month increase. Services inflation is expected to rise above 5%, a figure closely monitored by the Bank of England. Inflation is projected to peak at 3.7% in late summer, with further increases expected due to tax hikes and wage growth linked to the Labour Government’s policies. The Bank of England has also reduced its GDP growth forecast for 2025 to 0.75%.
