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Inflation climbed once again from 3.6% to 3.8% between June and July in a notable blow to the government, according to the latest data.

The Office for National Statistics (ONS) announced on Wednesday that the usual measure for the UK’s inflation rate, the Consumer Price Index (CPI), was now at the highest level it has been for more than 18 months.

Labour has repeatedly promised to tackle the cost of living crisis – so the rise in inflation is bad news for chancellor Rachel Reeves.

Here’s why this is a big deal and what you need to know.

What is inflation?

Inflation is the rate at which prices increase and is one of the key indicators of how well the economy is performing.

The 3.8% rate for July is nearly double the 2% target which the government tasks the Bank of England with hitting.

Themain lever it uses to control inflation is interest rates – if inflation is too high, it makes it less likely that interest rates will be reduced.

What is behind the increase?

It was largely driven by price rises within the services industry, as inflation in the sector rose to 5%.

Food inflation was also at 4.9%, pushed upwards by the rising cost of beef, chocolate, confectionery, instant coffee and fresh orange juice.

The cost of eating out and non-alcoholic beverages also bumped up prices, as did air fares, which went up by a staggering 30.2%.

For comparison, air fares rose by just 13.3% between June and July in........

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