The latest reading is expected on Wednesday, 19 August ’26, likely to frame the scale of the challenge for the new PM in easing pressures on households amid the fallout from the Iran war.
Economists say a surge in inflation is likely after the energy regulator lifted its cap on household gas and electricity bills in July ’26.
British households are experiencing a renewed cost of living squeeze. Official figures are expected to reflect this week that soaring energy bills drove up inflation in July ’26 to close to 3%.
The ongoing Iran war continues to disrupt global energy markets. Economists predict the surge in UK gas & electricity bills last month may push Britain’s headline inflation rate to 2.9%.
The figures from the Office for National Statistics (ONS), which are due on Wednesday, 19 August ‘26, indicate a fresh squeeze on household budgets.
The Bank of England is considering increasing interest rates as early as September. This decision is in response to fears over stubbornly high inflation becoming entrenched in the economy.
According to the Daily Telegraph, reports also emerged overnight that the water regulator, Ofwat, was considering plans to impose surge pricing on water usage during droughts. Consumers may be charged a higher tariff per unit of water during the summer and a lower tariff during the winter. Alternatively, consumers may be charged higher prices if they exceed a certain threshold of water usage.
The latest snapshot may highlight the challenge facing Andy Burnham’s government to ease the financial pressure on households & businesses before a challenging autumn budget.
Economists said that a rise in inflation, as measured by the consumer prices index, was likely. This was after the energy regulator, Ofgem, removed its cap on household gas and electricity bills by 13% in July ’26.
The chief economist at the accountancy firm RSM UK, Thomas Pugh, said that the increase may add about 0.44 percentage points to headline inflation. The increase may be partly offset with a decline in fuel prices.
