UK inflation rises to 2.9% as energy costs surge, food price inflation at five-year low
Overall inflation rose to 2.9% in July, driven by higher energy bills, while food price inflation slowed to 1.3%, its lowest in nearly five years.
The Full Story
A plain summary built from the channels that reported this story.
The latest official figures show UK inflation rose to 2.9% in the 12 months to July, up from 2.6% in June, marking the highest level since March. The increase was driven largely by a 13% rise in the energy price cap, which pushed up domestic gas and electricity bills. The jump was widely expected by forecasters, but it adds fresh pressure on household budgets and complicates the government's cost of living promises.
Food price inflation, however, offered a brighter note. It slowed to 1.3%, the lowest rate in nearly five years, with meat and sugar products seeing smaller increases. But prices remain high in absolute terms compared with two or three years ago, and the relief is fragile. Analysts warn that energy costs could rise further in October, and that the impact of higher energy prices may feed through to food and other goods over time.
The rise in inflation is closely linked to the conflict between the United States and Iran, which has pushed up gas prices. The energy price cap is forecast to rise again by around 4% in October, just as households begin to use more heating. The Bank of England's target remains 2%, and today's figures keep interest rates under pressure. Investors are betting on a possible rate rise before the end of the year.
Chancellor John Healey said Britain's economy was resilient, pointing to measures such as a temporary VAT cut on electricity and a £2 bus fare cap. He acknowledged there was more to do. The government has promised further support in the budget due in late October, but higher inflation makes it more expensive to service national debt and to fund public services.
Across the country, the impact is uneven. Businesses in hospitality and farming are feeling the squeeze from energy and supply costs. Community food pantries report continued demand even as food inflation slows. The outlook remains uncertain, with the Middle East conflict and global energy markets likely to shape the path of prices in the coming months.
On screen
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Key Claims
Claims reported during this story's coverage, mapped by channel. Ordered by how many channels carried each claim.
| Claim | Channel 5 | BBC News | BBC One | Channel 4 | ITV | Sky News |
|---|---|---|---|---|---|---|
| Food price inflation was reported to be at its lowest rate in nearly five years. | ||||||
| Inflation increased to 2.9% in July from 2.6% in June. | ||||||
| The rise in inflation was driven by an increase in the energy price cap. | ||||||
| Energy price cap rose by 13% in July, with gas prices rising more than electricity. | · | · | ||||
| Energy bills are forecast to rise further in October. | · | · | · | |||
| Economists expected inflation to edge up further in the months ahead. | · | · | · | · | ||
| Food inflation is slowing, with meat and sugar prices starting to fall. | · | · | · | · | ||
| The US-Israel war with Iran was reported as driving gas prices up. | · | · | · | · | ||
| Experts predicted an interest rate rise before the end of the year. | · | · | · | · | · | |
| Gilt yields are near a 20-year high, affecting government debt interest costs, which are up about £100 billion a year. | · | · | · | · | · | |
| Graduate job vacancies fell to just over 8,300 last month, a 45% decline from July last year. | · | · | · | · | · | |
| The energy price cap rise was expected to be repeated in the autumn. | · | · | · | · | · |
Channel Perspectives
What each channel focused on, with key quotes.
Sky News focused on the overall rise in inflation, explaining the mechanics of the energy price cap and its direct effect on the figures. It also highlighted the wider economic context, including rising gas prices, gilt yields, and the impact on the Chancellor's budget headroom. The tone was analytical, with a business correspondent breaking down the data.
- “inflation's risen to its highest level in four months, driven by a surge in the price of energy bills.”
- “That increase in inflation from energy bills was offset to some degree by a welcome slowdown in price increases. Food inflation, meat and sugar, products with lots of sugar in them are starting to fall.”
- “Debt interest is up about £100 billion a year. It's reducing the Chancellor's headroom.”
Channel 5 placed the story in the context of household budgets, emphasising the fall in food price inflation as a rare piece of good news. It also provided practical advice on switching tariffs and managing energy costs, and explained the implications for interest rates and mortgages.
- “food price rises while still rising at 1.3% are increasing at their lowest rate for nearly five years.”
- “the big issue is energy prices”
- “the average home is forecast to see a further 4% rise in bills from October”
BBC ONE West used a local angle, reporting from Kent where gas imports are processed. It highlighted the global factors behind the rise, the continued need for food banks despite slowing food inflation, and the long-term impact of price shocks on household expectations.
- “Inflation is up adding to pressure on household budgets”
- “Food prices have been quite moderate in terms of rises in the past few months, but they remain at very high levels compared to two or three years ago.”
- “Any global energy shock washes up on British shores right here, on what they call Energy Island.”
ITV1 focused on the real-world impact on businesses and families, using a fish and chip shop and a farmer as case studies. It stressed that while food inflation is low, it may not last, and that the government's ability to help is constrained by higher interest rates and debt costs.
- “Inflation took a big step up last month and this fish and chip shop felt it.”
- “The good news is food and drink inflation remains low, but how long can that last?”
- “The government can influence inflation but cannot control it.”
Channel 4 took a consumer-focused approach, illustrating the cost of living with specific examples like fish and chips, coffee, and kebab prices. It linked the inflation rise to the Iran war and highlighted the long-term accumulation of costs for businesses and households.
- “Today we have new figures for inflation which has risen to 2.9%.”
- “So while food inflation is now just 1.3%, it wasn't so long ago, March 2023, that it was over 19%.”
- “It's been a rollercoaster few years for most, especially businesses.”
This is the signed edition of the BBC News at Six, carrying the same report as BBC ONE West. It emphasised the global energy supply chain and the persistent pressure on household budgets, with a focus on the community impact and the uncertainty from the Middle East conflict.
- “Inflation is up, adding to pressure on household budgets”
- “Food prices have been quite moderate in terms of rises in the past few months, but they remain at very high levels compared to two or three years ago.”
- “Any global energy shock washes up on British shores right here, on what they call Energy Island.”
Broadcast Timeline
News broadcasts tracked for this story, in time order.