Britain’s annual inflation rate rose to 2.9% in July, up from 2.6% in June, driven largely by higher household energy costs, official figures show.
The Office for National Statistics (ONS) said the increase followed a 13% rise in the household energy price cap introduced in July. The jump in gas prices was the largest in almost four years, adding to pressure on household budgets.
The July figure was in line with economists’ expectations but above the Bank of England’s 2.8% forecast. Core inflation, which excludes food and energy prices, also came in slightly higher than expected at 2.6%.
The rise comes as global energy markets remain under pressure from the conflict involving the United States and Iran. Analysts expect inflation to remain elevated in the coming months as higher energy costs continue to feed through to households and businesses.
The Bank of England has kept its benchmark interest rate at 3.75%, while maintaining a 2% inflation target. A Reuters poll of economists found that most expect the rate to remain unchanged for the rest of 2026 despite renewed inflationary pressures.
The latest figures add to pressure on Prime Minister Andy Burnham’s government to ease the cost-of-living burden, as households continue to face higher energy and other living costs.
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