The core consumer price index, a key measure of inflation watched closely by the Federal Reserve, jumped to 3.1% in July, marking the largest gain in six months as companies grapple with President Donald Trump’s trade war.

Prices in the restaurants and hotels division rose overall by 3.4% in the 12 months to July 2025, up from 2.6% in the 12 months to June. On a monthly basis, prices rose by 0.4% in July 2025, compared with a fall of 0.4% a year ago.

Prices in the UK rose by 3.8% in the year to July, driven mainly by a jump in the price of air fares and food. That means inflation is at its highest level since January 2024 and still far above the Bank of England's target of 2%,