The Office for National Statistics reported that UK inflation accelerated to 2.9% in July 2026, the highest in four months, after the energy price cap rose 13% and natural gas prices jumped nearly 15% due to the impact of the war in the Middle East, even as food prices, fuel costs, and airfares declined, helping to cushion the rise. The figure was in line with market expectations, leading most analysts to expect the Bank of England to keep its policy rate at 3.75%, as the labour market began to cool, with core inflation steady at 2.6% and services inflation slowing to 3.4%.
