CPI Inflation Rises to 2.9% in July, a Four-Month High, on Higher Energy Bills

The Office for National Statistics reported on 19 August 2026 that UK Consumer Prices Index (CPI) inflation rose to 2.9% in the 12 months to July, up from 2.6% in June and its highest level since March — driven almost entirely by a 13% hike in Ofgem's household energy price cap that took effect on 1 July, which added around £221 to the average annual dual-fuel bill and pushed gas prices up 14.7% year-on-year, the largest gas price rise since October 2022. CPIH (including owner-occupiers' housing costs) rose to 3.1% from 2.8%, while core inflation held flat at 2.6%. Services inflation eased slightly to 3.4% from 3.6%, and food price inflation slowed to 1.3%, its lowest rate in nearly five years. Economists said the rise reflected the one-off energy cap reset rather than a broadening of price pressures, supporting expectations the Bank of England will hold Bank Rate at 3.75% at its 17 September meeting, with a further Ofgem price cap increase expected 26 August.