UK Inflation Hits Four-Month High on Energy Price Shock

UK inflation has reached its highest level in four months, rising to 2.9% in July 2026 due to soaring energy prices and a 13% increase in the Ofgem energy price cap.

The ongoing Middle East conflict and shipping disruptions through the Strait of Hormuz have added pressure to global oil and gas prices, squeezing household costs higher.

Despite food inflation slowing down, economists warn that UK inflation could reach 3.5% later this year, with a worst-case Treasury scenario pointing to 4.3% in early 2027.