UK inflation picks up after July surge in household energy bills

British inflation rose last month as expected to reach its highest rate since March, pushed higher by an increase in household energy bills after a 13% increase in a price cap set by regulator Ofgem.

Annual consumer price inflation rose to 2.9% in July from a 15-month low of 2.6% in June, the Office for National Statistics said on Wednesday.

Economists polled by Reuters had widely expected to see a rise in inflation to 2.9%, although the Bank of England predicted a smaller rise to 2.8% in forecasts published at the end of last month.

Core inflation, which excludes the impact of energy and food prices, came in a little higher than expected at 2.6% rather than the 2.5% median Reuters poll prediction.

"Iran war inflation continues to impact prices here at home, but Britain's economy is resilient," finance minister John Healey said in response to the data.

Sterling and British government bond futures showed little immediate reaction to the data, which was broadly as expected.