UK Inflation Rate Hits 2.9% as Housing Costs Soar
Britain's inflation rate climbed to 2.9% in July, up from 2.6% in June, according to the Office for National Statistics (ONS). The Consumer Prices Index (CPI) including owner occupiers' housing costs rose 3.1% in the 12 months through July, while the standard CPI rose 2.9%. On a monthly basis, both measures increased 0.3% in July.
The main upward pressure on inflation came from housing and household services, which reached 4.1% in July, up from 2.7% in June. Prices in this division rose 0.9% on the month, compared to a 0.4% decline in the same month last year.
The increase was driven by higher gas prices, which rose 14.7% in July, and electricity prices, which increased 3.6%. The energy price cap set by Ofgem contributed to the higher prices, with an estimated annual bill of £1,862 for an average household paying by direct debit for dual fuel.
On the other hand, transport inflation eased sharply, with annual price growth in this category slowing to 3.6% in July from 5.7% in June. Motor fuels were the main reason, with diesel prices falling by 8.8 pence per liter between June and July.