UK Inflation Rises to 2.9% in July as Household Energy Costs Surge

UK consumer price inflation accelerated to 2.9% year-on-year in July, up from a 15-month low of 2.6% in June and the highest rate since March, as household energy costs jumped sharply. The increase was driven primarily by a 13% rise in Ofgem's energy price cap, which pushed the average annual gas and electricity bill up by 221 pounds to 1,862 pounds. The July reading came in exactly as analysts had forecast.

Analysts warned inflation is expected to continue climbing, with projections pointing to a peak above 3% later in 2026, pressured by elevated energy prices and disruptions linked to the Strait of Hormuz.