UK Inflation Hits 15-Month High as Energy Prices Soar

UK inflation has risen to its highest rate since March after energy prices surged due to the ongoing Iran war. The Office for National Statistics (ONS) reported that Consumer Prices Index (CPI) inflation jumped to 2.9% in July, up from a 15-month low of 2.6% in June.

The steep increase was driven by a sharp rise in gas prices following the recent change to the energy price cap. The average gas and electricity bill increased by £221 to £1,862 a year, with the largest rise in gas prices seen in almost four years.

Chancellor John Healey stated that the Government is taking action to help under-pressure households and the wider economy, but acknowledged that 'there is more to do.' The ONS noted that last month's lower crude oil costs had only partly offset the impact of the energy price cap hike. Crude oil prices have since rebounded above $90 a barrel as the Middle East conflict continues.

The latest data also showed Retail Prices Index (RPI) inflation rose to 3.2% in July from 3% in June, which is used to calculate next year's train fare increase.