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

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.