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UK inflation set to rise in July as energy bills increase

Economists expect the Ofgem energy price cap hike to add about 0.5 percentage points to July CPI, before any offsets from easing fuel costs.

Reported · Written up by our desk · Energy

OilPrice reports that UK CPI inflation is expected to climb to 2.9% in July, up from June’s 15-month low of 2.6%, ahead of the Office for National Statistics release on Wednesday.

The article points to Ofgem’s recent energy price cap increase, which allowed households’ average gas and electricity bill to rise by £221, or 13%, to £1,862 per year in July.

OilPrice says the energy bill change is expected to add 0.5 percentage points to the July inflation reading, even as motor fuel inflation may ease and partly offset the impact.

The piece also notes that the price-cap-driven lift could put additional pressure on household budgets and complicate the outlook for UK interest rates, according to cited economists Ellie Henderson and Thomas Pug.

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