The Consumer Prices Index rose 2% in June from a year ago, the same pace as the month before, the Office for National Statistics said Wednesday. Economists had expected a reading of 1.9%.

Services inflation — which the central bank is watching more closely for signs of domestic price pressures — also held at 5.7%, which is higher than the BOE predicted in its last forecasts.

BOE officials, notably chief economist Huw Pill, have expressed concern about lingering inflationary forces in the labour market and services sector.

A tight labour market and the large increase in the minimum wage are still forcing companies to pay more to attract staff. Companies especially in the restaurant and pub businesses have been able to pass on higher prices to their customers.

This month’s figures will help shape debate at the BOE on when to lower the benchmark lending rate, which officials left at a 16-year high for almost a year in order to curtail price pressures. Pill and others have signalled they want to see more concrete evidence that price pressures are subsiding before loosening policy.

Traders are betting on a roughly 43% chance of a reduction at its next meeting on Aug 1 with any vote for a loosening expected to be closely run.

An interest rate cut next month would provide an early boost to Keir Starmer’s new government and millions of mortgage holders who are about to refinance their deals at elevated levels.