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Jump in energy bills drives UK inflation to highest rate for four months

Official figures show rising household energy costs pushed the annual rate of price rises higher in July.

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Jump in energy bills drives UK inflation to highest rate for four months

Higher energy bills drove UK inflation up to 2.9% in the year to July, the highest level in four months, according to official figures.

The Office for National Statistics said rising gas and electricity costs were the main contributor to the increase, offsetting falls in some other categories.

Inflation remains above the Bank of England's 2% target, adding to the challenge facing policymakers as they weigh decisions on interest rates.

“The rise is a reminder that energy prices still have the power to knock inflation off course.”
A chief economist at a London consultancy

Households have faced a prolonged squeeze on living standards in recent years, and many say energy remains one of their biggest monthly concerns.

“Energy is a cost people cannot easily cut back on, so increases feed straight through to household budgets,” said one senior economist.

The Treasury said it remained committed to bringing inflation down and pointed to support available for the most vulnerable households.

Opposition parties said the figures showed families were still struggling, and called for further action to ease the pressure on bills.

Economists will be watching upcoming data closely for signs of whether the rise is a temporary blip or the start of a more persistent trend.

Prices for some goods and services, including certain food items and clothing, rose more slowly over the period, the figures showed, partly offsetting the upward pressure from energy and illustrating how unevenly inflation is spread across the economy.

The Bank of England's next interest rate decision is expected to take the latest figures into account, alongside data on wages and economic growth.

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