Inflation rose to 2.9%. What it means if you're selling

CPI inflation is the rate at which the general price of goods and services is rising over twelve months. It is not a house price measure and it is not a mortgage rate. It reaches a seller through one chain only: inflation shapes what the Bank of England does with the base rate, the base rate shapes what lenders expect, and lender expectations shape what your buyer can borrow.

What did inflation actually do in July?

CPI rose to 2.9% in the twelve months to July 2026, up from 2.6% in June, according to the ONS release published on 19 August 2026. Core inflation, which strips out energy, food, alcohol and tobacco, held at 2.6%. Services inflation, the measure the Bank watches most closely, fell to 3.4% from 3.6%.

Two of those three numbers moved in the reassuring direction. The headline went up. The underlying measures did not.

Why did inflation rise when the base rate has not moved?

Because the rise came from energy, not from borrowing. Ofgem raised the domestic price cap by 13% from 1 July 2026, taking it to £1,663 a year for a household using typical amounts, with gas up around 24% and electricity around 5%. The ONS recorded gas prices rising 14.7% over the month.

• Housing and household services made the largest upward contribution to the July change, according to the ONS.
• Furniture also pushed the annual rate up.
• Transport pulled the other way, with diesel down 8.8p a litre over the month.

In plain terms, it cost more to heat and run a home in July than it did a year earlier, and that is what moved the headline.

Does this mean mortgage rates are about to rise?

Not automatically. Fixed mortgage rates are priced off what lenders expect interest rates to average over the years ahead, not off today's base rate, so a figure everybody already forecast tends to be in the price before it is published. Both Pantheon Macroeconomics and Deutsche Bank had pencilled in 2.9% ahead of the release.

The part worth watching is the Bank's own committee. On 29 July 2026 it held Bank Rate at 3.75% by six votes to three, with the three dissenters preferring an immediate rise to 4.00%. Its central projection has inflation peaking near 3.2% in the final quarter of this year. The next decision lands on 17 September 2026.

What does this mean for my sale?

• If you have already agreed a sale, your buyer's rate was fixed when their mortgage offer was issued, so today's figure does not reprice it.
• If your buyer is still applying, the rate they are quoted this month is the one that matters, and it reflects expectations rather than the July print on its own.
• If your sale is running long, the risk is the calendar rather than the headline. A mortgage offer that expires has to be re-issued at whatever rates exist on that day.
• If you have not listed yet, nothing in this release argues for rushing and nothing in it argues for waiting.

Should I wait until inflation comes down before I sell?

Waiting for a better economic backdrop is a bet on a number nobody controls, and the Bank's own forecast has inflation higher later this year before it settles. The decision that is actually yours is a different one. What your home is worth now, what it would cost you to sell, and whether the move you want to make works at those figures.

Those three you can find out this week. The rest of it you cannot, and no amount of watching the release calendar will change that.

The headline rate belongs to the country. The decision belongs to you.

ValuQ gives UK homeowners free, side-by-side property valuations from competing local estate agents. It is free for homeowners, always, and sellers stay anonymous until they choose an agent, so finding out where you stand does not start a single phone call.