UK inflation rises to 2.9% on energy bill surge

British inflation surged to a four-month high in July, driven by a sharp rise in household energy bills, presenting an immediate challenge for new Prime Minister Andy Burnham who has pledged to help households through increasingly difficult economic conditions. The Consumer Prices Index rose to 2.9 per cent in July, up from 2.6 per cent in June and the highest level since March, according to official data from the Office for National Statistics published on August 19, 2026.

The increase was largely forecast and follows a 13 per cent hike in the energy price cap regulated by Ofgem last month, which raised the typical annual gas and electricity bill by £221 to £1,862. Economists widely expected the rise, though the Bank of England had predicted a slightly smaller increase. The central bank has forecast inflation could peak at 3.2 per cent later this year. This inflationary pressure is expected to intensify, with forecasts pointing to a further 4 per cent rise in the next quarterly energy price cap covering October to December, due to be announced on August 26.

Speaking during a visit to the North East, Prime Minister Burnham attributed much of the renewed inflationary pressure to...