UK Inflation Hits Four-Month High Amid Energy Price Surge

UK inflation has hit its highest level in four months due to rising energy costs. The Consumer Prices Index rose to 2.9% from a year earlier, up from 2.6% in June and matching economists' expectations.

The biggest pressure on prices came from domestic energy, with Ofgem raising its price cap by 13% from July 1 after wholesale gas prices increased due to the Middle East conflict. Gas costs have taken the bigger hit, rising by about 24%, compared to roughly 5% for electricity.

The Bank of England kept its policy rate at 3.75% in July, but warned that inflation is likely to move above 3% later this year as higher energy costs work through the economy.