UK Inflation Hits Four-Month High on Surging Energy Costs

UK inflation rose to 2.9% in July, matching forecasts, as household energy bills surged by 13%. This is a four-month high and comes despite predictions from the Bank of England that inflation would peak at 3.2% later this year.

The jump in energy costs was a major contributor to the increase in inflation, which has been exacerbated by the ongoing war in Iran. The conflict has disrupted global oil supplies, leading to higher prices for consumers.

Core inflation, which excludes energy and food prices, remained steady at 2.6% in July, while services inflation eased to 3.4%. Food and non-alcoholic drink price inflation cooled to an almost two-year low of 1.3%, suggesting that supermarket competition has helped absorb the shock of higher production costs.

Finance Minister John Healey said that Britain's economy is resilient and can withstand the impact of inflation, while Chief Economist at KPMG Yael Selfin expects inflation to reach 3.5%.