UK Inflation Hits Four-Month High as Energy Bills Soar

UK inflation hit a four-month high of 2.9% in July, up from 2.6% in June, according to official figures released by the Office for National Statistics (ONS). The increase was largely driven by higher energy bills, which saw a 13% price cap rise last month.

The ongoing Middle East conflict continues to impact global energy prices, with the Strait of Hormuz remaining a volatile region. Jonathan Raymond, investment manager at Quilter Cheviot, noted that 'a renewed spike in inflation has been expected' due to the conflict's continued effects on prices.

While services inflation was the main driver of the July increase, food inflation actually fell to 1.3% with prices dropping for items such as pizza, quiche, and butter. Similarly, prices declined for shoes, men's clothes, garden furniture, and TVs.

The UK government has announced plans to reduce cost-of-living pressures through measures like tax cuts on household electricity prices and bus fare caps, as new Prime Minister Andy Burnham aims to address rising living costs.