UK consumer price inflation climbed to 2.9% in July, its highest level in four months, after forecasts anticipated a jump driven by rising energy costs. Gas prices recorded their sharpest increase in nearly four years, propelled by the effective closure of the Strait of Hormuz during the US-Iran conflict and surging European demand amid a continental heatwave.
Core inflation, which strips out volatile energy and food prices, held steady at 2.6%, while food and drink inflation eased to 1.3%, its lowest rate in nearly five years. Cornwall Insight forecasts a further 4% rise in household energy bills when the October cap is set on 26 August. Oil prices have climbed back above $90 a barrel.
Separately, the Competition and Markets Authority opened probes into Trainline, Virgin Atlantic and RED Driving School over concerns about full price display. Inflation is projected to reach approximately 3.5% by year-end.