UK Inflation Hits 2.9%, Energy Prices Drive Rise

UK inflation rose to 2.9% in July, driven by higher energy prices and concerns over food costs due to the summer heatwave.

The Consumer Prices Index (CPI) inflation rate increased from a 15-month low of 2.6% in June, with core inflation remaining at 2.6% despite stripping out energy and food costs.

The 13% hike in Ofgem's energy price cap last month contributed significantly to the rise, with the average gas and electricity bill increasing by £221 to £1,862 a year.

Producers are warning that soaring temperatures and droughts across the UK and Europe will drive food prices higher, with some predicting an upward curve in inflation to reach 3.5% by year's end.