According to the UK’s Office for National Statistics and Bloomberg, annual consumer inflation in the UK grew to 2.9% in July 2026, up from 2.6% in June, marking a four‑month high. The main driver of the inflation acceleration was a jump in household utility bills after the regulator revised the price cap on electricity and gas. At the same time, core inflation (excluding energy, food, alcohol, and tobacco) remained unchanged at 2.6%, while services inflation dipped from 3.6% to 3.4%.
Experts warn of a worsening strain on UK living standards: another increase in energy tariffs is expected in October, which will continue to push up the cost of living. Despite government measures to reduce the tax burden on electricity bills, further energy price rises and higher yields on UK government bonds add to the risks of an economic slowdown and higher sovereign debt‑servicing costs.
Inflationary pressure persists at the pan‑European level as well, driven by the ongoing conflict in the Middle East and volatility in energy markets. ECB chief economist Philip Lane forecasts that a new wave of inflation in the eurozone to the 2% target in 2026 will not be possible — price growth in the euro bloc is expected to remain around 3% through year‑end.