UK inflation rises to 2.9% in July as the energy price cap goes up

UK consumer price inflation rose to 2.9% in the twelve months to July 2026, up from 2.6% in June, the Office for National Statistics reported on 19 August.

The numbers

• CPI: 2.9%, from 2.6% in June
• CPIH, which includes owner occupiers' housing costs: 3.1%, from 2.8%
• Core CPI, excluding energy, food, alcohol and tobacco: 2.6%, unchanged
• Goods inflation: 2.2%, from 1.7%
• Services inflation: 3.4%

What pushed inflation up

The largest upward contribution came from housing and household services, especially gas and electricity. Gas prices rose 14.7% between June and July after the energy regulator Ofgem raised its price cap.

Transport pulled in the other direction: diesel prices fell by 8.8 pence per litre between June and July.

Why the Bank of England is split

The detail of this release sits at the centre of the Bank of England's debate. Headline inflation rose because of household energy bills, while core inflation was unchanged and services inflation held at 3.4%. In July, six members of the Monetary Policy Committee voted to keep Bank Rate at 3.75%, while three wanted an increase, worried that energy costs would feed into wider prices and wages.

The committee's next decision is on 17 September; see what to watch at the Bank of England. For traders of GBP/USD, the balance between energy-driven headline inflation and steadier core measures is the thread to follow.