ICAEW chief economist Suren Thiru said July CPI rose to 2.9%, increasing the
odds of further Bank of England tightening. Drought-driven food-price rises and
a surge in energy costs mean inflation could exceed 3.5% later this year,
especially if disruptions in the Strait of Hormuz persist. The fall in services
inflation likely reflects temporary VAT cuts for tourist sites and children’s
meals rather than a cooling of underlying price pressures; the data are unlikely
to prompt a September hike but raise the probability of additional tightening
before end-2026.
