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UK inflation expected near 3% as energy bill cap lifts
Economists project inflation will rise to about 2.9% in July after Ofgem increased the household gas and electricity bill cap by 13%.
The Guardian reports that the UK’s latest inflation reading due Wednesday is expected to show a renewed cost of living squeeze, with economists forecasting July headline consumer price inflation near 3% as higher energy bills feed through.
The outlook centers on an increase in household gas and electricity costs after Ofgem lifted the energy bill cap in July by 13%, a move economists say would add roughly 0.44 percentage points to headline inflation, though lower petrol and diesel prices may partially offset that impact.
According to The Guardian, economists also link the pressure on inflation to broader volatility in energy markets amid the Iran war, which they say has contributed to shocks in global oil and gas prices.
The piece adds that the jump would raise the stakes for the next UK government and comes as the Bank of England considers whether to lift interest rates from as early as September if inflation proves sticky.