{"id":124374,"date":"2026-08-16T11:00:00","date_gmt":"2026-08-16T10:00:00","guid":{"rendered":"https:\/\/en.econostrum.info\/uk\/?p=124374"},"modified":"2026-08-16T09:45:13","modified_gmt":"2026-08-16T08:45:13","slug":"inflation-families-face-sharply-higher-bills","status":"publish","type":"post","link":"https:\/\/en.econostrum.info\/uk\/inflation-families-face-sharply-higher-bills\/","title":{"rendered":"Inflation Pressure Returns as UK Families Face Sharply Higher Energy Bills"},"content":{"rendered":"\n

British households are facing renewed pressure from energy costs as official inflation figures <\/strong>due this week are expected to show a marked rise in July. The increase follows a 13% rise in Ofgem\u2019s household gas and electricity price cap from the start of the month, adding directly to domestic bills.<\/p>\n\n\n\n

The figures arrive as the economic effects of conflict in the Middle East continue to influence global energy markets. Higher oil and gas prices, disruption to shipping routes and weak European gas storage levels are adding uncertainty for households, businesses and the Bank of England.<\/p>\n\n\n\n

Energy Bills Are Expected to Push Inflation Higher<\/strong><\/h2>\n\n\n\n

According to The Guardian, economists expect the consumer prices index to rise from 2.6% in June to about 2.9% in July. Thomas Pugh<\/a>, chief economist at RSM UK, said the increase in the Ofgem price cap would add about 0.44 percentage points to headline inflation, although lower petrol and diesel prices could offset part of that effect.<\/p>\n\n\n\n

The rise comes after inflation had declined from 3.8% last year and had been moving closer to the Bank of England\u2019s 2% target. The outbreak of the Iran war changed that outlook by lifting global energy costs and increasing volatility in oil and gas markets.<\/p>\n\n\n\n

The Telegraph reported that Brent crude<\/strong> had risen from about $70 a barrel at the end of February to more than $87, an increase of roughly 25%. Oil prices also exceeded $100 during the most severe periods of disruption linked to the conflict and the closure of the Strait of Hormuz.<\/p>\n\n\n\n

Energy pressures extend beyond household bills. According to The Telegraph, petrol and diesel prices have risen by 22% and 27% respectively since February, while producer input price inflation reached 7.3% in June. Higher fuel and natural gas costs are also affecting transport, manufacturing and fertiliser production.<\/p>\n\n\n\n

Food costs are another source of pressure. Natural gas accounts for around four-fifths of the cost of nitrogen fertiliser, while hot weather and water shortages are affecting agricultural conditions in England.<\/p>\n\n\n\n

\"\"
UK Inflation Set to Rise as Energy Costs Surge \u00a9 Shutterstock<\/em><\/figcaption><\/figure>\n\n\n\n

Bank of England Faces a More Difficult Interest-Rate Outlook<\/strong><\/h2>\n\n\n\n

The Bank of England<\/a> kept its main policy rate unchanged at 3.75% in July as policymakers assessed the risk that higher inflation could become more persistent. The Bank expects inflation to reach 3.2% before the end of 2026.<\/p>\n\n\n\n

Government measures are intended to reduce some of the pressure. Prime Minister Andy Burnham has announced a cut in VAT on electricity bills<\/strong>, expected to reduce average consumer electricity costs by \u00a345 a year from October, alongside a \u00a32 cap on bus fares in England.<\/p>\n\n\n\n

According to The Guardian, the Bank estimates that these measures will lower the headline inflation rate by 0.1 percentage point. At the same time, financial markets are pricing in the possibility of higher borrowing costs, with investors anticipating two quarter-point rate<\/strong> increases <\/strong>before the end of next year.<\/p>\n\n\n\n

The wider picture remains mixed. Official figures released last week showed that the UK economy continued to grow during the first half of 2026 at the fastest pace in the G7. Wage growth, however, is expected to slow, while real earnings growth has fallen from around 0.4% at the start of the year to 0.1% since the Iran war began.<\/p>\n\n\n\n

For households, the immediate issue is straightforward: higher energy costs are returning just as inflation had been easing. The July data will provide the clearest indication yet of how strongly that change is feeding into everyday prices.<\/p>\n","protected":false},"excerpt":{"rendered":"

UK inflation set to rise as higher energy bills renew pressure on household budgets. A sharp increase in regulated household energy costs is expected to push the July rate close to 3%, raising fresh concerns over living costs and interest rates.<\/p>\n","protected":false},"author":10,"featured_media":124379,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[39],"tags":[],"class_list":["post-124374","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-energy","generate-columns","tablet-grid-50","mobile-grid-100","grid-parent","grid-33","no-featured-image-padding"],"_links":{"self":[{"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/posts\/124374","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/comments?post=124374"}],"version-history":[{"count":3,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/posts\/124374\/revisions"}],"predecessor-version":[{"id":124380,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/posts\/124374\/revisions\/124380"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/media\/124379"}],"wp:attachment":[{"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/media?parent=124374"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/categories?post=124374"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/tags?post=124374"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}