Inflation edges up to 2.9% as the energy cap resets
The Commons Library's economic update notes 'unexpected resilience' even as the Ofgem cap passed on dearer wholesale energy.
Consumer price inflation rose to 2.9% in July, according to the House of Commons Library's latest economic update, after the Ofgem price cap picked up higher wholesale energy prices.
The mechanics matter: the cap resets periodically to reflect wholesale markets, so energy-driven moves in CPI arrive in steps rather than drifts. This one pushed the headline rate further above the 2% target.
The briefing's broader theme is an economy showing unexpected resilience while conflict abroad keeps energy markets unsettled — which is precisely the combination that leaves the Bank of England forecasting a further rise in inflation later this year.
Set against slowing pay growth, the July number reads less like a demand problem and more like an administered-price step. The MPC's job is deciding whether households will see it the same way.