UK inflation has risen unexpectedly to 3.8% in July, up from 3.6% in June, according to figures released by the Office for National Statistics (ONS). The jump highlights renewed pressure on household budgets as the cost of living continues to climb, affecting everyday essentials and borrowing costs.

Inflation, which measures the rate at which prices rise over time, directly impacts how far people’s money goes and the affordability of credit. The increase comes amid persistent concerns about food prices and energy bills, areas where many households say they are struggling the most. Shoppers have spoken of “penny pinching in all areas” and the “weekly shop going up so much” as the squeeze on family budgets deepens.

The higher-than-expected figure could complicate the Bank of England’s decisions on interest rates, as policymakers weigh the need to curb inflation without stifling economic growth. Economists warn that sustained price pressures may further delay hopes of relief for households and businesses already grappling with tight financial conditions.