UK Inflation Hits 3.1% Amid Ongoing War in Middle East

UK inflation rose to 3.1% in July, up from 2.6% in June, as the ongoing war in the Middle East continues to put pressure on household bills.

The Consumer Price Index (CPI) figures show that consumer price inflation increased by 0.3%, while core inflation remained unchanged at 2.6%.

Schroders' head of global economics David Rees believes manufactured goods prices are likely to rise in the months ahead, which could lead to higher food inflation due to drought and a potential Super El Niño in 2027.

Jonathan Raymond from Quilter Cheviot warns that pressure on inflation is unlikely to ease soon, but notes that government initiatives such as cuts to VAT on energy bills may start to have an impact in the coming months.