UK Inflation Hits Highest Rate Since March as Iran War Drives Energy Prices
UK inflation has jumped to its highest rate since March, driven by a surge in energy prices following the Iran war. The Office for National Statistics (ONS) reported that the Retail Prices Index (RPI) rose to 3.2% last month from 3% in June.
The steep rise in the July to September energy cap was partly offset by lower crude oil costs, which fell sharply in July amid hopes of a resolution to the Middle East conflict.
However, crude oil has since rocketed back up above $90 per barrel as the war shows no sign of ending and the Strait of Hormuz shipping route remains closed. The ONS said other upward pressures included furniture prices falling by less than usual for this time of year, and a smaller fall for clothing prices due to reduced discounting.
The average gas and electricity bill has increased by £221 to £1,862 per year following a 13% hike in the energy price cap last month.
Chancellor John Healey said the Iran war 'continues to impact prices here at home' and that the government is taking steps to mitigate the effects of rising inflation, including capping bus fares at £2 and cutting VAT on electricity bills.