UK inflation rose to 2.4% in July, driven by a surge in gas costs, according to official figures. The increase pushed the rate above the Bank of England's 2% target for the first time since April.
Gas costs drive inflation higher
The Office for National Statistics (ONS) reported that consumer prices index (CPI) inflation rose from 2% in June to 2.4% in July. The main driver was a sharp increase in gas prices, which rose by 12.3% in the year to July, compared with a 0.5% rise in June.
Energy prices overall contributed 1.2 percentage points to the inflation rate, up from 0.9 percentage points in June. The ONS said the rise in gas costs was partly offset by lower price growth for food and non-alcoholic beverages.
Impact on households and the economy
The rise in inflation will add to pressure on household budgets, particularly for those on lower incomes who spend a larger proportion of their income on energy bills. The Bank of England is expected to keep interest rates on hold at 5.25% when it meets next month, as it seeks to balance the need to control inflation with the risk of slowing the economy.
Economists had expected inflation to rise to 2.3% in July, so the actual figure was slightly higher than forecast. The ONS said the rise in gas costs was driven by higher wholesale prices, which have been affected by geopolitical tensions and supply concerns.
