UK Inflation Hits 2.9% as Energy Prices Soar

Inflation rose to its highest rate since March at 2.9% in July, driven by a sharp increase in gas prices following the change to the energy price cap last month.

The Consumer Prices Index (CPI) measure of inflation increased from 2.6% in June to 2.9% in July, with the largest rise in gas prices for almost four years.

Energy analysts at Cornwall Insight are predicting another expected rise in the price cap this October, which could add another 4% to energy bills.

The Government has pledged to cut VAT on electricity bills for six months starting from September, but any saving from this may be wiped out by the predicted rise in the price cap.

Mike Hardie, Deputy Director for Prices at the ONS, said: “Inflation rose in July, driven by a sharp increase in gas prices following this month’s change to the energy price cap. This was the largest rise in gas prices for almost four years.”