UK Inflation Surges to 2.9% Amid Energy Price Cap Hike

UK inflation has surged to its highest rate since March, reaching 2.9% in July, according to official figures from the Office for National Statistics (ONS). The increase is largely due to a 13% hike in Ofgem's energy price cap, which has raised the average gas and electricity bill by £221 to £1,862 per year.

The Consumer Prices Index (CPI) rose by 2.9% in the 12 months to July 2026, up from 2.6% in the 12 months to June 2026. The ONS said that the rise in gas prices was the biggest since almost four years ago.

Chancellor John Healey attributed the inflation surge to the ongoing Iran war, which continues to impact prices at home. He promised to provide relief to those feeling the strain by capping bus fares at £2 and cutting VAT on electricity bills.