New UK cost of living crisis looms with soaring energy bills forecast to lift inflation

Latest reading on Wednesday likely to frame scale of challenge for new PM to ease pressures on households amid Iran war fallout British households are facing a renewed cost of living squeeze, with official figures expected to show this week that soaring energy bills drove up inflation in July to close to 3%. As the Iran war continues to send shock waves through global energy markets, economists predict the surge in UK gas and electricity bills last month will push Britain’s headline inflation rate to 2.9%. In a fresh squeeze on household budgets, the figures from the Office for National Statistics (ONS) due on Wednesday are forecast to show a jump from a rate of 2.6% in June. It comes as the Bank of England considers raising interest rates from as early as September in response to fears over stubbornly high inflation becoming entrenched in the economy. The latest snapshot will also highlight the challenge facing Andy Burnham’s government to ease the financial pressure on households and businesses before a difficult autumn budget.

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