UK Inflation Surges to 2.9% Amid Energy Price Hikes

UK inflation surged to 2.9% in July, exceeding the Bank of England's 2% target and putting pressure on household finances.

The main contributor to this increase was a £221 hike in typical annual energy bills, taking the average dual-fuel bill to £1,862 per year.

Regulator Ofgem raised the energy price cap by 13% from 1 July, citing wholesale gas costs linked to the Iran war and supply disruptions in the Gulf and Norway.

The Office for National Statistics (ONS) reported that services inflation eased from 3.6% in June to 3.4%, while core inflation stood at 2.6% in the 12 months to July, slightly above economists' expectations of 2.5%.