Inflation rose back above the Bank of England’s 2% target in July according to figures released this morning by the Office for National Statistics (ONS), which pegged price rises at 2.2% overall.  Core inflation, however, which excludes volatile food and energy costs, dropped to 3.3% last month, down from 3.5% in June. The increase marks the first since December 2023, since when inflation has fallen steadily. Economists had expected inflation to rise to 2.3% because of fast-rising prices in airline flights, package holidays, and hotels but, in fact, the ONS said, the largest downward contribution actually came from restaurants and hotels. The largest upward contributions came from housing and household services, as the prices of gas and electricity remained at elevated levels. Service price inflation also fell for the second month in a row to 5.2%, down from 5.7% in June. This has led former Bank of England interest rate setter Michael Saunder to write in the i newspaper: “The big picture is disinflationary. Pay growth is slowing, economic growth is sluggish, the previous tightness in the labour market has unwound, and the upward effects on core inflation of the previous energy price surge are fading”. All in all, the detailed figures are “reassuring” he adds, concluding: “By the end of next year, interest rates probably will be at – or heading for – a number starting with a three once again”.

House prices in the UK rose by 2.7% in the 12 months to June to an average of £288,000 the ONS also said this morning. June's annual increase was the same as May's, which was the joint-highest since March 2023. Rents for private housing also rose by 8.6% in the year to July, the same in the year to June.

The Institute for Fiscal Studies (IFS) has found Britain’s poorest households saw the bill for their weekly food shop rise by 29.1% at the height of the cost of living crisis, compared with 23.5% for better-off households, because the sharpest price increases fell on cheaper brands. The IFS calls this “cheapflation,” and says grocery items that were among the cheapest, including staples such as milk, pasta and butter, rose by 36% over the two years to last September, while more expensive versions of the same items rose by just 16%. If the poorest 25% of households had faced the same inflation rate for groceries as the richest 25%, their annual food bills would have been cut by £100, the IFS said, noting that in no equivalent 24-month period in recent times has there been such high differences in the inflation rates of these two groups.

Britain is set to steam ahead of Germany to become Europe’s largest entertainment and media market next year, according to PwC’s Global Entertainment and Media Outlook for 2024-2028. The UK’s entertainment and media sector is forecast to exceed £100bn in revenue for the first time in 2024, with growth expected to reach £121bn by 2028, driven by a huge increase in internet advertising, cinema, and live music.  

65% of alternative funds managers - which focus on markets beyond stocks and bonds such as property, private equity and infrastructure investing, have been hit with governance related fines or sanctions in the last two years due to governance failures, Bovill Newgate has found. Paul Ford, head of regulatory and governance at Bovill Newgate, said: “The alternative fund managers we surveyed have always taken governance extremely seriously, but the regulatory landscape is constantly changing and becoming even more complex, particularly for the global firms. Bovill Newgate are experts in global financial services regulation and compliance, their website says.

Chancellor Rachel Reeves is said to be considering reducing by £20m a £65m state aid package to expand an AstraZeneca vaccine-manufacturing site in Speke, Merseyside, promised by former Chancellor Jeremy Hunt. The cut to funding is part of a wide-reaching review of all investment decisions taken by the previous administration, the Financial Times says, a review to plug a £22bn black hole in public finances Reeves claims was “covered up” by the Conservative government. “The decision to cut funding by a third would come as a blow to AstraZeneca, whose chief executive, Pascal Soriot – the highest-paid boss in the FTSE 100 – announced last month that it was ‘absolutely ready to go’ with the scheme and hoped the investment could be concluded quickly,” the Guardian says. A Treasury spokesperson said: “We are committed to making the UK one of the best places in the world to develop and manufacture new and innovative medicines. The chancellor receives regular updates on this planned investment in Speke, and we are in positive discussions with AstraZeneca to support its delivery”.

Post Office IT boss Chris Brocklesby is stepping down after failing to replace the company’s faulty Horizon software, which led to hundreds of sub-postmasters being wrongfully convicted on fraud related charges in one of Britain’s largest miscarriages of justice. Brocklesby joined as chief transformation officer last August on a one-year contract. He will leave next month, to be replaced on an interim basis by Andy Nice, who led a turnaround plan at former National Lottery operator Camelot. The Post Office began work to replace Horizon in 2021, and expected to so by next year, but the switch is proving disastrous: a series of delays is said to mean the system could remain in place for many more years, while the cost to replace it has ballooned. The Telegraph says The Treasury has been asked to contribute a further £1bn towards the replacement bill, yet the project was expected initially to cost £180m.

BP is to use its expertise gained drilling for oil “in extreme environments” on Earth to help Nasa in its quest to establish a base on the Moon, The Telegraph reports. The British energy giant has signed a deal with the US space agency that could ultimately lead to collaboration on a range of technology, including hydrogen power, high-capacity batteries and small nuclear fission systems. Nasa is working on creating the first lunar space station, while future plans include develop living accommodation on the moon’s surface, along with energy systems, and this is where BP’s expertise in said to come in. BP said the initial phase of the agreement will focus on developing standards that “allow engineers and scientists to visualise equipment in remote locations more than 7,000 feet underwater or millions of miles away on another planet”. Last year, The UK Space Agency agreed £2.9m in funding for Rolls-Royce to explore how nuclear power might support a future moon base.

John Lewis is shedding 153 jobs as part of a major restructuring plan, Retail Week reports. The headcount reduction equates to around 1% of its current workforce, and the department store giant says it hopes to achieve the cut by natural attrition and voluntary redundancies.

Asda is continuing to lose market share according to the latest data from Kantar. Sales at Asda have fallen by nearly £300m over the past year, from £4.52bn to £4.25bn, and its market share has dropped 1.1%. Meanwhile overall sales have increased by 3.8% at Tesco, Sainsbury’s and Lidl in the four weeks to 4^th August, compared with the same period a year ago.  

Bellway has walked away from plans to buy smaller rival housebuilder Crest Nicholson. Bellway made three proposals before its £720m offer was deemed acceptable, and last week the two said the deal was progressing well. No explanation for the surprise decision has been given by Bellway.

Flutter Entertainment, the owner of Paddy Power, is in detailed talks to buy Snaitech, the Italian consumer gambling arm of London-listed Playtech, for about £2bn - a deal worth more than Playtech’s entire current market capitalisation, Sky News says.

The Advertising Standards Authority (ASA) has banned adverts featuring Dragons’ Den star Steven Bartlett for nutrition brands Zoe and Huel after ruling they “omitted material information” by failing to disclose their commercial relationship with the celebrity entrepreneur. Bartlett, who made his fortune after co-founding Social Chain in Manchester, is an investor in Zoe and a Director at Huel. The advert for Zoe, posted on Facebook, featured an image of Bartlett with a Zoe patch on his arm, with a quote from him saying: “If you haven’t tried Zoe yet, give it a shot. It might just change your life.” Defending the ad, Zoe said the average consumer would understand that there was a commercial relationship if a celebrity appeared in an ad for a brand, and argued that the consumer did not need to know the exact nature of that relationship. Huel, whose ads featured Bartlett stating that its Daily Greens powder was the “best product” it had released, argued pretty much the same. However the ASA disagreed, saying many consumers were unlikely to understand from the ads that Bartlett had a financial interest in the brands’ performance.

Avon Products Inc (API), which owns beauty brand Avon in the UK, Europe and Latin America, has filed for bankruptcy as it tries to off-load more than $1bn of debt, including millions of dollars in liabilities linked to lawsuits alleging that talc in its products caused cancer. API has filed for Chapter 11 bankruptcy in the US, a move it says will allow it to address its debt obligations in an “orderly manner”. Parent company Natura has proposed buying back its trading operations outside the US for $125m (£97m) after the bankruptcy process is complete. API has already spent $225m in costs defending itself against personal injury lawsuits and settlement payments and said it does not have “sufficient liquidity” to defend or settle the 386 individual talc-related cases. The company has total debts of $1.3bn and liabilities relating to talc claims worth $78m.

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