UK inflation rose to 2.9% in July, up from 2.6% in June, according to the Office for National Statistics. This increase was largely driven by higher gas prices, which saw a 14.7% rise in July.
Housing and household services, along with furniture costs, contributed to the upward pressure on the inflation rate. Transport, however, provided a partially offsetting downward contribution.
The rise in energy charges in July followed the US-Israel war on Iran, which impacted global energy markets. Despite this, separate official figures indicating a slowdown in the jobs market, including private sector pay growth, may lead economists to believe the Bank of England will not need to increase interest rates.
Crude oil prices have also seen a rise this week, with Brent crude up 0.65% to $91.61 a barrel, after a ceasefire between the US and Iran expired.