UK inflation rises to 2.9% as food price inflation hits five-year low
Overall inflation rose to 2.9% in July, driven by energy bills, but food price inflation fell to 1.3%, its lowest in nearly five years.
The Full Story
A plain summary built from the channels that reported this story.
Inflation in the UK rose to 2.9% in July, up from 2.6% in June, according to the Office for National Statistics. The increase, the first since March, was widely expected and was driven largely by a 13% rise in the energy price cap, which pushed up domestic gas and electricity bills. The government pointed to the impact of the US-Israel war with Iran on gas prices, while analysts noted that the rise in the headline rate was partially offset by a slowdown in food price increases.
Food price inflation fell to 1.3% in July, its lowest rate in nearly five years, offering some relief to households still grappling with the cumulative effects of the cost-of-living crisis. Meat and sugar products were among the items seeing slower price rises. However, the Bank of England's target of 2% remains below the current rate, and economists expect inflation to creep higher in the autumn as energy bills are set to rise again.
The Chancellor, John Healey, said Britain's economy was resilient and highlighted measures such as cutting VAT on electricity and capping bus fares at £2. But rising inflation makes it harder for the government to provide financial support and increases the cost of servicing national debt, which has already pushed gilt yields to near 20-year highs. The budget on October 28th is expected to be constrained by these pressures.
Households are already feeling the squeeze. Community food pantries report continued demand, even as food inflation moderates, and energy costs are forecast to rise by around 4% in October. Businesses, from fish and chip shops to restaurants, say the accumulated costs of the past few years remain severe. Meanwhile, the labour market is cooling, with falling vacancies and weaker wage growth, which may help keep inflation in check but also signals economic strain.
The government has promised more help with the cost of living, but its room for manoeuvre is limited. As one analyst put it, any global energy shock washes up on British shores, and the path of inflation now depends heavily on events in the Middle East. For now, prices are rising more slowly for food, but the overall trend is upward, and many households will continue to face difficult choices.
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 |
|---|---|---|---|---|---|---|
| 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. | · | · | ||||
| Broadcasters attributed the July inflation rise to higher energy prices. | · | · | · | |||
| Energy bills are forecast to rise further in October. | · | · | · | |||
| Economists expected inflation to edge up further in the months ahead. | · | · | · | · | ||
| Energy price cap rose by 13% in July, with gas prices rising more than electricity. | · | · | · | · | ||
| 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. | · | · | · | · | · | |
| Food inflation was reported at 1.3%. | · | · | · | · | · | |
| Food price inflation was reported to be at its lowest rate in nearly five years. | · | · | · | · | · | |
| Gilt yields are near a 20-year high, affecting government debt interest costs, which are up about £100 billion a year. | · | · | · | · | · |
Channel Perspectives
What each channel focused on, with key quotes.
Sky News focused on the overall inflation rise, explaining the mechanics of the energy price cap and its direct effect on the CPI. The report also covered the broader economic context, including gas prices and gilt yields, and the implications for the Chancellor's budget. It highlighted that the rise was expected and that food inflation was slowing.
- “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.”
Channel 5's coverage emphasised the fall in food price inflation to a five-year low, while explaining the overall rise to 2.9%. They provided practical consumer advice on dealing with energy bills and explained the implications for interest rates and mortgages in a clear, accessible way.
- “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 We hear about that quite a lot We will the price cap went up last month and the average home is forecast to see a further 4% rise in bills from October”
BBC ONE West focused on the human impact of inflation, visiting a community food pantry and the Isle of Grain energy hub. It highlighted that food inflation is moderating but prices remain high, and that energy bills are set to rise again. The report connected global energy shocks to local household pressures.
- “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.”
BBC NEWS (Signed) carried a very similar report to BBC ONE West, with Faisal Islam's analysis from Kent. It emphasised the same points: inflation up due to energy, food inflation moderate but high, and the ongoing impact of the Middle East conflict on UK energy prices.
- “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.”
ITV1's coverage used a fish and chip shop and a farmer to illustrate the impact of energy costs on businesses and households. It highlighted the squeeze on budgets, the rise to 2.9%, and the forecast of further energy price increases. The report also discussed the constraints on government support and the effect on interest rates.
- “It was expected, but unwelcome all the same. Inflation figures are up.”
- “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's report focused on the tangible effects of inflation on everyday items, such as fish and chips, coffee, and a train ticket. It used a Liverpool setting to show how consumers and small businesses are coping. The report also contextualised the current 2.9% rate against the peak of 11.1% in 2022 and explained the role of the US-Iran war in driving gas prices.
- “Today we have new figures for inflation which has risen to 2.9%.”
- “But when we're talking about just how much more expensive things feel now, a lot of it is down to that very period.”
Broadcast Timeline
News broadcasts tracked for this story, in time order.