Higher energy price cap pushes up inflation

Inflation headed back up last month - partly due to higher energy bills.

According to the Office for National Statistics (ONS), inflation rose from 2.6% to 2.9% in the year to July.

That the biggest increase since March.

And even though many prices increased at a slower pace last month, the overall figure was pushed up by Ofgem’s energy price cap rising by 13%.

What is inflation?

Inflation is a measure of how fast prices are rising.

So if the figure goes up, your money doesn’t go as far in the shops.

And if it falls, then prices are still going up, but at a slightly slower rate.

The ONS tracks inflation by looking at the prices of items in an imaginary shopping basket each month and working out how much the total price has changed.

Government 'giving breathing space to people feeling the strain'

Responding to the latest figures, chancellor John Healey said the Iran war is continuing to impact prices "here at home".

However, he stressed that Britain's economy is "resilient" and that the government is working to tackle the cost of living.

"We have cut VAT on electricity bills and capped bus fares at £2 - to give breathing space to those feeling the strain," Mr Healey said.

The government has also hinted that more cost-of-living measures could be announced in the Budget on 28 October.

"There is more to do to restore hope and build a stronger economy where prosperity is shared more fairly across Britain," the chancellor added.

What can I do if I’m struggling with day-to-day costs?

If you’re worried about the rising cost of living, there are some practical steps you can take.

Look at your spending

It’s important to know not just how much money you’ve got coming in, but also where it’s going.

So take a close look at your income and outgoings, so you can see where savings can be made and make sure vital expenses are prioritised.

We’ve put together a guide to how to create a budget to help you get started. 

Check our money saving ideas

We’re regularly updating these pages with handy tips to help you cut costs at home, such as: 

• how to save energy
• how to cut your food bill
• 50 ways to cut your fuel costs
• how to make your money go further

We also share round-ups of standout deals and low-cost recipes that can help you keep costs down.

See what benefits you could claim 

You might be entitled to some financial support to help you make ends meet, even if you’re in work.

Give us a ring and we can check for you, or use our free benefits calculator to see what support you could get.

It might be more than you realise.

Ask for debt advice

If you’re dealing with debts that you’re struggling to pay off, contact us for confidential, practical and impartial debt advice.