UK inflation rises in July amid higher gas prices
By Michele Maatouk
Date: Wednesday 19 Aug 2026
(Sharecast News) - UK inflation rose as expected in July, pushed up in part by higher gas prices, according to data released on Wednesday by the Office for National Statistics.
Consumer price inflation increased to 2.9% from 2.6% in June, in line with economists' expectations.
Housing and household services, and furniture made the largest upward contributions to the monthly change, while transport made the largest, partially offsetting, downward contribution.
Within housing and household services, gas prices rose 14.7% in July, having fallen 7.2% a year earlier. The ONS explained that the jump in prices came mainly from higher standard variable tariffs, after Ofgem changed the energy price cap.
The energy regulator estimated that for an average household paying by direct debit for dual fuel, this equated to an annual bill of £1,862, up £221.
Core inflation - which excludes energy, food, alcohol and tobacco - was 2.6% in the 12 months to July, unchanged from June and versus expectations for a small decline to 2.5%.
ONS deputy director for prices Mike Hardie said: "Inflation rose in July, driven by a sharp increase in gas prices following this month's change to the energy price cap. This was the largest rise in gas prices for almost four years.
"Other upward pressures included furniture prices falling by less than usual for this time of year, and also a smaller fall for clothing prices due to reduced discounting.
"The prices of raw materials and goods leaving factories slowed again, driven by a drop in the prices of crude oil and refined petroleum respectively."
Susannah Streeter, chief investment strategist at Wealth Club, said that while the headline rate "may be concerning, and there are niggles of worry about what could be ahead", if you strip out volatile food and fuel prices, then the core rate of inflation has held steady at 2.6%.
"This will be more reassuring for the Bank of England, especially with services inflation easing from 3.6% to 3.4%. Policymakers will also have an eye on the cooling labour market, with vacancies falling and public-sector pay increases easing," she said. "Right now, two interest rate hikes are still priced in by financial markets, but forecasts have changed wildly, and much will depend on the data in the months to come."
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