UK Inflation Jumps to 2.9% as Energy Bills Bite

UK inflation rose to 2.9% in July from 2.6% in June, largely due to higher gas and electricity bills after Ofgem’s price-cap reset, pushing household costs higher and complicating the outlook for the Bank of England and the government. Services inflation eased to 3.4% and core CPI stayed at 2.6%, suggesting some underlying price pressures are still contained, but energy-driven inflation may persist into the colder months. Officials and economists warned that elevated energy prices, linked partly to geopolitical tensions, could keep inflation near or above 3% later in the year. The data also added pressure on UK borrowing costs, with 10-year gilt yields near multi-decade highs, reinforcing expectations that rate cuts may be delayed and keeping policymakers wary of further tightening.