City economists have broadly indicated that inflation is forecast to peak later this year

Inflation has surged following the reset of the energy price cap, according to official figures, marking what is likely to be the start of a prolonged period of rising price growth.

The Office for National Statistics (ONS) placed the consumer price index inflation reading at 2.9 per cent for the 12 months to July. The previous inflation reading stood at 2.6 per cent.

Services inflation, a closely monitored measure by Bank of England policymakers as it offers signals on wage pressures, eased to 3.4 per cent, while core inflation, which excludes food and energy, came in at 2.6 per cent.

“Upward pressures included furniture prices falling by less than usual for this time of year, and also a smaller fall for clothing prices due to reduced discounting,” Mike Hardie, deputy director for prices at the ONS, said.

“The prices of raw materials and goods leaving factories slowed again, driven by a drop of crude oil and refined petroleum respectively.”, as reported by City AM.

Chancellor John Healey has declared “Britain’s economy is resilient” despite the Iran war impacting “prices here at home”.

He threw his weight behind government cost of living measures designed to ease the burden on households.

“We have cut VAT on electricity bills and capped bus fares at £2 – to give breathing space to those feeling the strain,” Healey said. “There is more to do to restore hope and build a stronger economy where prosperity is shared more fairly across Britain.”

Shadow chancellor Sir Mel Stride said: “Price rises are accelerating once again under Labour. When the Conservatives left office inflation was bang on the two per cent target, now it has been above that level for 22 months in a row.

“This will be a worry for families across the country. Labour’s tax rises and business bashing have driven the cost of living higher and higher, yet Andy Burnham refuses to rule out yet more tax hikes at the Budget.”

Scott Gardner, investment strategist at J.P. Morgan Personal Investing, said July data showed the impact of the Iran war was feeding into household bills.

“Businesses are also facing higher input prices which are being passed on to buyers and could rise heading into the colder months later this year,” Gardner said. “Falls in services inflation and shop prices are helping to offset some of these pressures for now but the jury is out on whether this will last.”

The steeper increase in prices in the year to July threatens to undermine Andy Burnham’s cost of living agenda.

City economists have broadly indicated that inflation is forecast to peak later this year or in early 2027 at a minimum of around three per cent. The delay will materialise as the effects of volatile energy prices gradually filter through to British households.

The previous government under Sir Keir Starmer maintained that diplomacy with President Trump and leaders across the Middle East was the “best economic policy” to get bills down for households.

Prior to departing Number 10, Starmer called upon his successor to take a more active role in international relations. Burnham has faced mounting criticism for neglecting diplomatic responsibilities, choosing instead to concentrate on matters at home.

On Tuesday, UK borrowing costs as measured by 10-year gilt yields reached a near-two decade peak as traders’ concerns about interest rate increases intensified.

The UK government issued medium-term bonds with a yield of 5.155 per cent, marking the highest interest rate on such debt since 2007.

The Bank of England has recently cautioned that it may be forced to lift interest rates should disruption to oil and gas trade flows across the Gulf region persist as a consequence of tensions between the US and Iran.

Traders remain divided over whether the Bank might opt to raise rates amid inflation concerns at its next decision in September.

Felix Feather, economist at Aberdeen, noted that markets remained “largely undisturbed” by the elevated inflation rate and continued to anticipate “modest tightening” in monetary policy.

“Given evidence of a slowdown in underlying domestically generated inflation, as opposed to more internationally driven goods such as energy commodities, and soft labour market conditions, we see the Bank on hold for the rest of the year,” Feather said.

Elevated borrowing costs could place government plans to alleviate the cost of living under additional strain, restricting the room for tax reductions or increased expenditure that might ease the financial burden on households and businesses.

Operator

Good day, and thank you for standing by. Welcome to Service Stream Full Year ’26 Results. [Operator Instructions] Please be advised that today’s conference is being recorded.

I would now like to hand the conference over to your speakers today, Leigh MacKender and Linda Kow. Please go ahead.

Leigh MacKender
CEO, MD & Director

Good morning, ladies and gentlemen, and welcome to Service Stream’s results presentation for financial year ’26. As per the introduction, my name is Leigh MacKender, Managing Director of Service Stream, and I’m joined today by our Chief Financial Officer, Linda Kow.

In terms of the agenda, I’ll start by covering some of the group’s highlights and provide an update on Service Stream’s operational and financial performance. I’ll then pass to Linda who will talk through the group’s financial performance and capital management strategy in greater detail. We’ll then provide an update with regards to trading conditions, group outlook for FY ’27. And finally, we’ll open up the call for questions.

I personally wish to begin by acknowledging the traditional custodians of the land in which we meet today, and I pay our respects to the elders past, present and emerging.

Okay. Turning to Slide 3. Service Stream’s journey over the last 10 years has been one centered around growth and diversification, ideally looking to leverage the

Trainline, Virgin Atlantic and RED Driving School are being investigated by the consumer watchdog over concerns they are not showing full prices upfront to customers.

The Competition and Markets Authority (CMA) is examining whether the three companies engaged in so-called ‘drip pricing’, which is an illegal practice where mandatory fees are not included in the headline price shown to customers.

If the CMA concludes that the firms have broken the law, it can fine them or order them to compensate customers.

Trainline and Virgin Atlantic said they were committed to transparency for customers and would engage fully with the CMA.

In the case of Trainline, the CMA said it observed fees of up to £2.79 being added on to headline train fares, and up to £1.50 for coach bookings.

“Both are costs that can add up for frequent travellers,” the CMA said.

Trainline has been accused of drip pricing before. In 2023, the Office of Rail and Road said it and six other third-party train ticket sellers were not being upfront about fees.

Virgin Atlantic is being investigated to see whether mandatory resort fees and local taxes were included in the upfront prices shown to customers buying package holidays. The CMA said these fees vary but can go up to hundreds of pounds, significantly increasing the cost of a holiday.

And the watchdog is looking into whether RED Driving School included mandatory booking fees and digital fees in the upfront price shown to people buying driving lessons. The CMA said the fees could be more than £7 per lesson.

Earlier this year, the CMA ordered two other driving schools to give refunds to more than 80,000 customers after they did not disclose the total price for lessons upfront during the online booking process.

Emma Cochrane, the CMA’s executive director for consumer protection, said: “The first price customers see should be the price they pay.

“At a time when many households are watching every pound they spend, it is important that people are not surprised by extra fees when booking train and coach tickets, holidays or driving lessons.”

A spokesperson for Virgin Atlantic Holidays said it takes its responsibility to customers “incredibly seriously”, adding: “we always want to ensure they can make an informed decision when booking a holiday with us.

“Mandatory fees are indicated at multiple stages throughout the booking journey. We are reviewing the points raised by the CMA carefully and will cooperate fully with its investigation.”

A Trainline spokesperson said the company was “committed to offering customers a transparent booking experience with clear pricing and genuine value.

“We’ve proactively engaged with the CMA over several months and we are taking proactive steps to enhance how certain fees are presented to our customers.”

RED Driving School has been contacted for comment.

Since last year, the CMA has had the power to rule that consumer laws have been broken without having to take businesses to court.

Consumer rights group Which? said the CMA should not hesitate to use these powers, “especially after each firm has already received a warning advisory letter”.

Sue Davies, head of consumer rights policy at Which?, said: “Following comments made by the Prime Minister last week that unfair pricing practices have no place in our economy, this move sends a clear message to other businesses to follow the rules.

“At a time when household budgets are under strain, consumers must have confidence that businesses aren’t there to rip them off and that the regulator is willing to step in to protect their rights.”

Shares of infrastructure development company HG Infra Engineering jumped over 8% to Rs 551.95 on the BSE on Wednesday, after the company received a letter of intent from REC Power Development and Consultancy Ltd, which is a wholly owned subsidiary of REC Ltd.

In a regulatory filing on the BSE released on Tuesday, the company informed that it has received the letter of intent for the construction of 220/132/33 kV AIS Substation in Ranipur (Mau), and for 220/132/33kV AIS Substation in Chunar (Mirzapur), with their associated lines through a tariff-based competitive bidding process in the state of Uttar Pradesh.

The company had announced in May that it had been declared as a qualified bidder by the REC Power Development and Consultancy Ltd to build, own, operate and transfer the above-mentioned substations, and had secured the order with transmission charges worth Rs 45 crore per year for a period of 18 months.

HG Infra Engineering Q1 results

The company had reported a 77.5% year-on-year decline in its Q1 profit after tax to Rs 28.3 crore, from Rs 125.5 crore in the corresponding quarter of the previous year. Revenue from operations in the June quarter slipped 46.9% to Rs 907.2 crore, from Rs 1,709.2 crore in the same quarter last year.
The company’s EBITDA for this quarter stood at Rs 77 crore, down 67.3% from Rs 235.7 crore in the June quarter of FY26.

HG Infra Engineering Share Price

Shares of HG Infra Engineering have delivered over 2% gains in the last three months. However, the shares of the company have declined over 9% in the year so far. In the long term, HG Infra Engineering shares have delivered over 18% returns in the last three years, and 35% in the last five years.

This article was written by

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Seeking Alpha’s Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

UK inflation rose to 2.9 per cent in the year to July, up from 2.6 per cent the previous month, the Office for National Statistics said on Wednesday, after a 13 per cent increase in the energy price cap pushed up household bills.

The rise was in line with analysts’ expectations and took the consumer prices index (CPI) to its highest rate since March, according to figures published by the ONS. It follows a fall in inflation to 2.6 per cent in June.

The Ofgem price cap rose to £1,862 in July. It was the first time the cap had taken into account the rise in global oil and gas prices caused by the war with Iran, which is now close to entering its seventh month.

Mike Hardie, deputy director for prices at the ONS, said: “Inflation rose in July, driven by a sharp increase in gas prices following this month’s change to the energy price cap. This was the largest rise in gas prices for almost four years.

“Other upward pressures included furniture prices falling by less than usual for this time of year, and also a smaller fall for clothing prices due to reduced discounting.”

Food inflation fell to 1.3 per cent in July from 1.7 per cent the previous month, its lowest rate in almost five years. Services inflation, which is closely monitored by the Bank of England, edged down to 3.4 per cent from 3.6 per cent, while core inflation, which strips out volatile food and energy costs, was unchanged at 2.6 per cent.

The Bank is required to keep inflation at 2 per cent over the medium term. Interest rates have been held at 3.75 per cent since December, but investors think there is a chance of a rise before the end of the year, especially if there are further flare-ups in the Iran war.

Yael Selfin, chief economist at KPMG UK, said the data would not be “cause [for] significant concern for the Bank of England, with domestic price pressures still moderating and inflation broadly in line with its latest projections”.

John Healey, the chancellor, said the conflict in the Gulf “continues to impact prices here at home, but Britain’s economy is resilient”. He said he and prime minister Andy Burnham had given families “breathing space” by removing VAT from electricity bills, a measure that takes effect in October and lasts six months.

Mel Stride, the shadow chancellor, said: “This will be a worry for families across the country. Labour’s tax rises and business bashing have driven the cost of living higher and higher, yet Andy Burnham refuses to rule out yet more tax hikes at the budget.”

Robert Jenrick, Reform’s Treasury spokesman, said: “Andy Burnham talks a big game but so far all his policies are doing is exploding people’s bills. The only way to cut the cost of living is to stop wasting money on foreign aid and benefits and spend it on working people instead.”

The July inflation figure, as measured by the retail price index (RPI), is typically used to set the annual increase in rail fares, although the previous chancellor, Rachel Reeves, announced in the November 2025 budget that fares would remain frozen until March 2027.

On Tuesday, long-term UK government borrowing costs came close to a post-1998 high amid a global bond sell-off. Separate data released earlier this week showed private-sector pay growth had slowed to a six-year low, which analysts said would reduce the likelihood of the Bank needing to act to tame inflation.