UK inflation rose to 2.9% in the year to July, the highest level recorded in four months, according to new figures from the Office for National Statistics (ONS). This increase was largely attributed to higher energy bills.
Gas prices saw their sharpest rise in almost four years, leading to a 13% increase in the cap on household energy bills from July 1. This added £221 a year to the typical bill. Energy costs surged following the start of the US-Israel war with Iran, which has restricted global oil supplies.
Despite the overall rise, some price growth slowed. Food inflation, at 1.3%, reached its lowest rate in nearly five years. Prices for pasta, olive oil, and fresh fruit reportedly fell in July.
Experts suggest that the current inflation figure is unlikely to prompt the Bank of England to alter its key interest rate at its upcoming September meeting. However, energy-related costs are anticipated to push inflation higher in the coming months, potentially peaking at around 3.5%.
Homes are forecast to experience a 4% rise in energy bills from October, which would bring them to their highest level since July 2023.