Inflation Hits 2.9% as Oil Prices Surge on Strait of Hormuz Tensions

UK inflation for July 2026 hit 2.9%, according to data released by the Office for National Statistics (ONS). This marks a rise from June's 2.6% and puts pressure on the Bank of England to adjust its monetary policy.

The Consumer Prices Index (CPI) also saw a monthly increase of 0.3%, which is higher than the 0.1% rise in July 2025. The housing costs component was a significant driver of this inflation, with a 12-month CPI rate of 4.6%

Brent crude oil prices have been rising due to supply constraints and tensions over the Strait of Hormuz. Donald Trump's claim that the waterway is 'NEW US territory' has added to market pressure.

The London Stock Exchange's FTSE 100 opened flat, but was supported by miners. The combination of elevated energy prices, rising gilt yields, and a fresh inflation print above the Bank of England's target leaves policymakers with limited room for maneuver.