UK INFLATION RISES TO 2.9% AS ENERGY BILLS INCREASE

UK inflation climbed to 2.9% in the 12 months to July, according to figures released by the Office for National Statistics. The rise was driven primarily by higher energy costs following Ofgem's 13% increase to the price cap on household gas and electricity bills, which took effect on 1 July and added £221 annually to the typical household's bill. The ONS attributed the energy price increase to "the largest rise in gas prices for almost four years". July's inflation rate marks the highest since March, when inflation stood at 3.3%.

ONS prices director Mike Hardie identified additional upward pressure from furniture prices, which fell by less than usual for the period, and clothing, which received smaller discounts than typical. Chancellor John Healey stated that the Iran war was continuing to affect UK prices, whilst asserting that Britain's economy remained resilient. Healey highlighted government measures including VAT cuts on electricity bills and a £2 cap on bus fares, saying "there is more to do to restore hope and build a stronger economy".

KPMG's chief economist Yael Selfin described July as marking the start of a gradual rise in inflation, though she stated the figure was insufficient to prompt changes to Bank of England interest rate decisions. Selfin projected energy-related costs would push inflation higher over coming months to approximately 3.5%. Shadow chancellor Mel Stride said the country was unprepared for global economic shocks, attributing this to Labour's "mismanagement" and stating ordinary people were "paying the price".