UK Inflation Surges to Four-Month High on Energy Price Hikes

The UK's annual consumer price inflation rose to 2.9% in July from a 15-month low of 2.6% in June, according to data released by the Office for National Statistics.

This increase was largely driven by a 13% rise in maximum tariff British regulators allow energy firms to charge households, the highest jump in household energy bills since March 2022.

The data comes as the war in Iran grinds on with no end in sight, and economists had widely expected a rise in inflation to 2.9%, although the Bank of England predicted a smaller rise to 2.8% in forecasts published at the end of last month.

The Bank of England is likely to be reassured by the absence of nasty surprises in Wednesday's data, and figures a day earlier showed a slightly cooler labour market, which may limit the lasting impact of inflation caused by the Iran war.