UK Inflation Set to Rise as Energy Bills Soar

The UK's inflation rate is set to rise in July, driven by higher energy bills and airfares. According to Victoria Scholar, head of investment at Interactive Investor, consumer price inflation is expected to jump from a 15-month low of 2.6% in the 12 months to June to around 2.9% in July.

The recent 13% increase in Ofgem's energy price cap has contributed significantly to this rise, with higher wholesale gas prices fuelled by geopolitical turmoil in the Middle East.

Scholar notes that the UK economy is expected to continue growing, potentially leading to demand-led inflation. The Bank of England may raise interest rates once more to keep inflation under control and bring it back to its 2% target.