Energy Price Hike Sends UK Inflation Soaring Again

UK inflation has reached its highest rate since March due to surging energy prices, which were driven up by the ongoing Iran conflict. According to official figures, energy prices rose by 13% after Ofgem's energy price cap was increased last month. This resulted in an average gas and electricity bill of £1,862 a year, a hike of £221.

The Office for National Statistics (ONS) said that inflation rose in July, driven by a sharp increase in gas prices. Other upward pressures included furniture prices falling less than usual for this time of year and clothing prices being affected by reduced discounting.

Crude oil costs had fallen sharply in July, but have since rocketed back up above $90 per barrel as the war shows no signs of ending. Chancellor John Healey said that the government is taking action to help under-pressure households and the wider economy, but acknowledged there is 'more to do'.

The Retail Prices Index (RPI) inflation rate rose to 3.2% in July from 3% in June, a key figure used to calculate next year's train fare increase. The government has already announced that rail fares in England will be frozen in 2026, but it is unclear if this freeze will be extended for another year.