UK inflation ticked up slightly in June, with the Consumer Prices Index including owner occupiers’ housing costs (CPIH) rising by 4.1% in the 12 months to June 2025, up from 4.0% in May, according to the latest data from the Office for National Statistics.
The Consumer Prices Index (CPI), which excludes owner occupiers’ housing costs, also increased to 3.6% in the year to June, up from 3.4% the previous month.
Both CPIH and CPI recorded monthly increases of 0.3%, compared with rises of 0.2% and 0.1% respectively in June 2024.
Transport costs, especially motor fuels, were the main drivers of the monthly increase in both inflation measures.
However, in the case of CPIH, housing and household services-particularly owner occupiers’ housing costs – provided a partial offset by applying downward pressure.
Core CPIH, which excludes energy, food, alcohol, and tobacco, rose by 4.3% in the year to June, up from 4.2% in May.
The CPIH goods rate rose from 2.0% to 2.4%, while the services rate eased slightly from 5.3% to 5.2%.
Core CPI also rose, increasing to 3.7% from 3.5%. The CPI goods rate matched CPIH, moving from 2.0% to 2.4%, while the CPI services rate remained unchanged at 4.7%.
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Sharon Beedham, relationship director at ONP Solicitors:
“Rising inflation adds another layer of complexity to an already fragile housing market. While Rachel Reeves’ announcement aims to support first-time buyers with expanded lending and mortgage guarantees, higher inflation could lead to increased interest rates, which in turn could dampen affordability and slow buyer momentum. It creates a difficult balancing act between making credit more accessible and ensuring it remains affordable over time.
“In this environment, speed and certainty in transactions become even more important. At ONP, we’re focused on helping buyers navigate this volatility by improving the efficiency of the conveyancing process. As economic headwinds strengthen, the property industry needs to be ready to adapt — that means embracing tech, improving communication across the chain, and reducing unnecessary delays that cost buyers both time and money.”
Ben Thompson, deputy CEO, Mortgage Advice Bureau:
“A slight uptick in inflation is a reminder that the path back to target won’t be completely smooth and entirely predictable. While the overall outlook into next year remains downward, persistent pressures—especially in services—may give the Bank of England reason to pause before moving on rates.
“It is, nonetheless, a great time to buy. With house prices having adjusted over the last few years, and numerous mortgage options now available, getting on the property ladder is more achievable than it has been in a while. In fact, many aspiring first time buyers who were priced out of the market last year may not realise they’re now in a strong position to buy.
“Our recent research shows that 56% of renters would buy a property if their mortgage payments equalled their current rental payments, highlighting a strong appetite among prospective buyers. It’s up to brokers to engage in meaningful conversations with customers, dispelling homeownership myths and educating them on the innovative solutions now available.”
Nathan Emerson, CEO of Propertymark:
“This news will provide no respite for people who are struggling with their personal finances at a time when there is widespread data suggesting Britain’s finances are in a ‘perilous’ state.”
“Housing plays a pivotal role in the UK economy, and considering the UK Government and the devolved administrations have set themselves ambitious housing targets, it’s important that there is strong affordability to support consumers with their housing ambitions.”
Richard Pike, chief sales and marketing officer at Phoebus:
“Today’s rise in inflation will be a setback for those hoping to see interest rates come down this summer. With the Bank of England’s 2% target slipping further out of reach, policymakers are likely to remain cautious.
“For the housing market, it means continued uncertainty. While the FCA’s recent decision to relax affordability requirements could encourage more activity among prospective buyers and those looking to remortgage, the real impact remains to be seen. Affordability pressures will persist for many borrowers on existing deals, particularly as fixed-rate terms come to an end.”
“In this environment, it’s vital that lenders stay agile. Having the right technology in place to manage risk, adapt to shifts in sentiment and deliver a smooth customer journey will be key to supporting brokers and borrowers through ongoing volatility.”
Hannah Goldstraw, senior recruitment consultant at Barrow Mount Recruitment:
“Another slight rise in inflation reinforces just how unpredictable the economic outlook remains. While the longer-term trend may still be downward, any increase in essential costs like transport puts added pressure on household budgets and, by extension, salary expectations.
“In the jobs market, we’re seeing this translate into candidates taking a firmer line on pay – particularly for roles that require commuting or have tight margins on take-home income.
“Employers need to be realistic about expectations if they want to attract and retain talent, especially with affordability still under strain.”
Paul Noble, CEO of Chetwood Bank:
“Further bad news for the Chancellor following the surprise shrinking of the economy last month. The best-laid plans of Number 11 still aren’t bearing fruit, and while I was relieved to see the U-turn on cutting the cash ISA tax free allowance, it’s not likely last night’s Mansion House speech will have lifted the public’s spirits.
“While there is no clear path to fix our predicament, the prospect of further pinching and hiking from the chancellor is making people up and down the country wince. The cost of living continues to spiral, and nothing that is being done seems to make a difference.
“With Andrew Bailey suggesting bigger cuts might be coming if the job market continues to suffer, Britons will have to rely on themselves to protect the value of their savings from this latest jump in inflation. Make sure every penny you have is working as hard as possible to improve your financial wellbeing, not gathering dust in your current account.”
Paresh Raja, CEO of Market Financial Solutions:
“With just over three weeks until the Bank of England’s next base rate decision, this morning’s inflation data feels like it has added significance. The headlines will likely be negative, and the focus from many will be on the fact that inflation is both rising slightly and still above the central bank’s 2% target, but that shouldn’t rule out a base rate cut on 7th August.
“The Bank of England’s Governor, Andrew Bailey, recently commented that he would consider lowering the base rate if the labour market continues to soften.
“And yet, his accompanying caution about cutting rates while inflation remains above 2% continues to frustrate many in the property market. That target now feels like more than a guideline – it’s starting to carry disproportionate and potentially harmful weight.
“The Bank has cut rates while inflation was above target in the past. This moment should be no different. Economic growth has stagnated for two consecutive months, so it feels like the right time to stop fixating on short-term CPI trends and start prioritising policies that support recovery.
“In turn, by cutting the base rate, the Bank would give property buyers and investors the confidence they need to resume their investment plans and encourage greater activity across the property market – and across the wider economy – in the final five months of the year.”
Dean Butler, managing director for retail direct at Standard Life, part of Phoenix Group:
“Inflation is proving to be stubborn once again, with June’s CPI reading rising to 3.6%. This uptick will be unwelcome news for the Bank of England, which is facing a delicate balancing act – bringing inflation back to its 2% target without further dampening economic growth, particularly following May’s unexpected GDP contraction.
“Today’s figures, along with expectations of a further inflation spike this Autumn, suggest the Bank will continue to approach any further interest rate cuts with caution, with the Monetary Policy Committee facing a tough decision when they meet again in August. If they do decide to cut rates, movements are likely to be incremental for the rest of this calendar year, however there are a number of factors in play – Bank of England Governor Andrew Bailey has also highlighted the job market as an area to watch, suggesting that a slowdown in employment could accelerate the pace of rate cuts.
“For borrowers, higher for longer rates mean the prospect of sustained higher costs, particularly for mortgage holders and those with other forms of debt. On the other hand, savers continue to benefit from competitive rates, with some best buy easy-access savings accounts still offering between 4% and 5% – though there’s a wide variation, so it’s worth shopping around. It’s worth noting that any cash gains are still likely to be marginal with inflation considered – those willing and able to accept an element of risk could consider investing for a better chance of substantial returns above inflation, perhaps through a tax efficient product like a stocks and shares ISA or, taking a longer-term view, a pension.”
Sarah Pennells, consumer finance expert at Royal London:
“Today’s figures are a disappointment to households, many of whom are paying higher bills after ‘Awful April’, when inflation was 3.5%.
“Our latest Financial Resilience Report shows that many are struggling, with one in five people telling us they have less than £100 in cash savings, and nearly the same number again saying they have nothing left or are overdrawn at the end of the month. Meanwhile, single-person households continue to face a ‘solo-living premium’, with 11% having no money left at the end of the month.
“Looking ahead, easing energy costs might offer brief respite, but the benefits will be limited this summer when usage is low, and housing costs – still historically high – keep budgets tight. If possible, consumers who have money left over once they’ve paid their bills should consider using this period to rebuild short-term savings and review long-term plans.”
