UK inflation rises by to 2.9% after Iran war fuelled increase in gas prices

UK inflation has jumped to its highest rate since March after energy prices were pushed up by the Iran war, official figures have shown.

Consumer Prices Index (CPI) inflation rose to 2.9% in July, up from a 15-month low of 2.6% in June, the Office for National Statistics (ONS) said on Wednesday.

It follows a 13% hike in Ofgem’s energy price cap last month, which increased the average gas and electricity bill by £221, making it £1,862 a year.

“Inflation rose in July, driven by a sharp increase in gas prices following this month’s change to the energy price cap,” said Mike Hardie, deputy director for prices at the ONS.

“This was the largest rise in gas prices for almost four years. Other upward pressures included furniture prices falling by less than usual for this time of year, and also a smaller fall for clothing prices due to reduced discounting.”

In response to the figures, Chancellor John Healey said: “Iran war inflation continues to impact prices here at home, but Britain’s economy is resilient.

“We have cut VAT on electricity bills and capped bus fares at £2 – to give breathing space to those feeling the strain.

“There is more to do to restore hope and build a stronger economy where prosperity is shared more fairly across Britain.”