The June 2025 figure was the highest recorded since January 2024, when the rate was 4%. On a monthly basis, the CPI rose by 0.3% in June 2025, compared with a rise of 0.1% in June 2024.
The CPI including owner-occupiers’ housing costs (CPIH) rose by 4.1% in the 12 months to June 2025, up from 4% in the 12 months to May.
The ONS said transport, particularly motor fuels, made the largest upward contribution to the monthly change in both CPIH and CPI annual rates; housing and household services, particularly owner-occupiers’ housing costs, made a large and partially offsetting downward contribution to CPIH.
Core CPI (CPI excluding energy, food, alcohol, and tobacco) rose by 3.7% in the 12 months to June 2025, up from 3.5% in the 12 months to May.
Isaac Stell, investment manager at Wealth Club, said: “Higher petrol costs saw headline inflation jump to its highest level since January 2024; bad news for consumers and bad news for those with a hopeful eye on imminent interest rate cuts.
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“The surprising strength of the inflation figures adds additional issues to the UK’s mounting economic woes. All eyes will turn to the Bank of England, who have indicated they are willing to cut rates given the cooling in the jobs market, but are unlikely to be able to justify a cut when inflation has started to run hot once again.
“In the absence of interest rate cuts, consumers are likely to feel a continued squeeze, unhelpful for the government’s growth agenda, which has yet to show signs of life itself. Awful April has rolled into miserable May and in turn rolled into joyless June. The government will now pin its hopes on a Jubilant July.”
Sarah Coles, head of personal finance at Hargreaves Lansdown, said: “The cost of petrol helped to fuel a larger-than-expected rise in inflation in June, to 3.6%. A surprise on the upside is never welcome, especially one that builds on previous rises and takes us back to the rate we last saw in January last year. The Bank of England won’t be delighted, but it isn’t expected to change tack on interest rates.
“The bank was already expecting a rise, just perhaps a slightly smaller one. The fact that oil price rises are behind the change, rather than something closer to home, is likely to cool concerns about inflation sticking around – especially given the spike in oil prices was relatively short-lived. It’s only if this passes through to higher prices more generally that it will hit the radar of the rate setters. A cut in August is still likely to be on the cards, with the chances of a cut falling very slightly, but still looking incredibly likely. Belief in a cut may well strengthen again if tomorrow’s employment data continues to show unemployment rising and wage increases slowing.”
This article was first published on Mortgage Solutions‘ sister site, YourMoney.com. Read: Inflation jumps to 3.6%
