The rise had been widely expected after Ofgem increased its household energy price cap by 13% from 1 July. The change added \u00a3221 to a typical annual gas and electricity bill, taking it to \u00a31,862, as higher wholesale energy costs linked to the conflict involving Iran fed through to consumers.<\/p>\n\n\n\n
According to the Office for National Statistics, July\u2019s increase was driven largely by a sharp rise in gas prices following the new energy price cap. Mike Hardie<\/a>, the ONS deputy director for prices, said it represented the largest increase in gas prices for almost four years.<\/p>\n\n\n\n Energy was the main contributor to July\u2019s stronger inflation reading, while some measures of underlying price pressure showed less movement. Core inflation<\/strong>, which excludes energy and food, remained unchanged at 2.6%.<\/p>\n\n\n\n Services inflation also eased, falling from 3.6% in June to 3.4% in July. The Guardian reported that economists viewed the softer labour market <\/strong>as a factor that could limit the risk of higher inflation becoming more persistent. Other categories also added upward pressure. According to the ONS, furniture prices fell by less than they normally do at this time of year, while clothing prices recorded a smaller seasonal decline because retailers offered fewer discounts.<\/p>\n\n\n\n At the same time, some price pressures moderated elsewhere. Prices paid for raw materials <\/strong>and goods leaving factories slowed, helped by lower crude oil and refined petroleum prices. Food and drink inflation <\/a>also fell from 1.7% in June to 1.3% in July. There were sharp differences within food categories. Fish prices increased by 13.6% over the year and fruit by 8.1%, while pizza prices fell by 8.5% and butter prices dropped by 5.3%.<\/p>\n\n\n\nEnergy Costs Drive the Rise While Underlying Pressures Remain Softer<\/strong><\/h2>\n\n\n\n