The UK consumer price index (CPI) inflation rose to 2.9% in July, up from 2.6% in June. Energy prices, particularly gas and electricity, were major contributors to this increase following Ofgem's price cap adjustment in July, with the typical dual-fuel bill rising by £221 to £1,862.
Higher energy prices and elevated borrowing costs complicate the outlook for both the government and the Bank of England, which held the Bank Rate at 3.75% in July. Economists widely predict that inflation is set to continue rising, particularly due to volatile energy prices.
Chancellor John Healey stated that “Britain’s economy is resilient,” but the Iran war is impacting “prices here at home.” He backed government measures aimed at easing the financial burden on families.
