UK inflation rises to 2.9% as Iran war fuels living costs squeeze

Higher energy costs push up CPI but jobs slowdown could deter Bank of England from raising interest rates UK inflation rose to 2.9% in July as the impact of the Iran war on energy prices triggered a renewed cost of living squeeze for British households. Underscoring the challenge for Andy Burnham’s government to give “breathing space” to hard-pressed consumers, the Office for National Statistics said inflation rose from 2.6% in June. It comes after British consumers faced the sharpest summer increase in energy charges in four years in July as the US-Israel war on Iran sent shock waves through global energy markets. City economists had forecast an increase in the consumer prices index measure of inflation to 2.9%. Against a volatile backdrop in the Middle East, the Bank of England is considering whether to raise interest rates from as early as next month in response to fears over stubbornly high inflation becoming entrenched in the economy.

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