MNI UK CPI Preview: July 2025

For the full document including summaries of 18 sellside analyst views click here.

• This week’s CPI data has taken on added importance following the close 5-4 vote split at the last MPC meeting. 
• Rather than services inflation, the MPC is focused on headline CPI which is expected to come in higher than in June (which saw some base effects weigh on aspects such as accommodation).
• From the previews that we have read the median expectation is for a 3.7%Y/Y (with a mean of 3.71%). This would be marginally below the BOE’s forecast of 3.76%Y/Y.
• The BOE forecast electricity and gas bills to fall 5.1%M/M in July whereas the Ofgem price cap fell 7.0%M/M. Some analysts did of course take the methodology change into effect but the difference between these two values on headline CPI will be just under 6bp which fully explains the gap between the BOE’s forecast and consensus.
• From the previews that we have read are lower for services than the BOE (4.8% median, 4.81% mean, 4.88% BOE). Interestingly, the overall expectation from the previews that we have read is that core will come in at 3.7% median / 3.69% mean (BOE 3.71%). But core goods is expected broadly in line with the BOE. These forecasts are therefore a little inconsistent.
• Food inflation is expected to increase further.
• And we look again at why CPI data is so important at the moment and how food prices can influence inflation expectations more than other goods / services.