UK Inflation Surges to 2.9% Amid Energy Price Pressures

The UK's inflation rate has surged to 2.9% in July, according to official data from the Office for National Statistics (ONS). This marks a significant increase from the previous reading of 2.6%. The upward pressure on prices was driven by factors such as furniture and clothing prices falling less than usual, and crude oil prices dropping.

Services inflation, which is closely watched by Bank of England policymakers, eased to 3.4% in July. Core inflation, which strips out food and energy prices, remained at 2.6%. Chancellor John Healey attributed the increase in inflation to the Iran war, saying it has impacted 'prices here at home'.

Healey also backed government cost of living measures aimed at easing pressures on families. However, Shadow Chancellor Sir Mel Stride criticized Labour's policies, stating that price rises are accelerating under their leadership. Investment strategist Scott Gardner warned that businesses are facing higher input prices, which could be passed on to consumers in the coming months.