UK inflation rose to 2.9% in July, up from 2.6% in June, driven by a 13% increase in the household energy price cap that took effect in July, adding £221 to typical annual bills. The rise is attributed to the ongoing US-Iran war, which has restricted global oil supplies and led to effective closures of the Strait of Hormuz, causing gas prices to soar at the fastest pace in nearly four years. Food inflation slowed to 1.3%, its lowest in five years, but analysts expect further increases as energy costs feed through, with inflation peaking around 3.5% in coming months. The Bank of England is expected to hold its benchmark rate at 3.75% at its September meeting, while the government faces pressure to support households amid rising borrowing costs and a looming budget.

Israel's housing ministry issued a tender for 1,234 settlement units in the E1 area of the occupied West Bank, a project that would sever the northern and southern West Bank and isolate East Jerusalem, undermining a two-state solution. The UK, France, Germany, Italy, and Canada issued a joint statement calling the move 'unacceptable' and urging Israel to retract the plans, while the UN Secretary-General warned of an 'existential threat' to a contiguous Palestinian state. Egypt, Jordan, and Palestine also condemned the project, citing international law and the ICJ's 2024 advisory opinion. The UK announced it will set out comprehensive measures, including sanctions, in the coming weeks. The tender deadline is 19 October, days before Israel's general election, making it harder for a future government to reverse.

Background: A BBC investigation previously located convicted people smuggler Twana Jamal, known as 'the godfather' of French migrant camps, living in Leicestershire under a false name and seeking asylum, with European officials reporting 15 other convicted smugglers in the UK. Today: Twana Jamal Khdir was arrested on Tuesday near Uppingham in a joint operation led by the Midlands Criminal Financial Investigations team with support from Leicestershire Police. He was charged by the Crown Prosecution Service and appeared at Leicester Magistrates' Court on Wednesday, where he pleaded guilty to entering the UK without valid entry clearance but not guilty to seeking to obtain leave to enter or remain by deceptive means. He has been remanded in custody and will next appear at Leicester Crown Court on 5 October. Khdir had previously been sentenced to five years in prison in France in 2016 for people smuggling, with prosecutors estimating he earned up to £100,000 a week moving migrants across the Channel.

Background: The UK government had previously proposed a £100,000 annual cap on political donations from overseas voters to prevent foreign money in UK elections. Today, Downing Street confirmed that a universal domestic cap on political donations will not be included in the upcoming elections bill, despite pressure from Labour MPs concerned about Nigel Farage's big-money backers. The government prioritizes measures against foreign interference and crypto donations, and officials cite potential delays to other provisions like lowering the voting age. Prime Minister Andy Burnham had earlier expressed support for a cap around £500,000, but the decision reflects a trade-off with other legislative priorities. A POLITICO analysis suggests a cap would have significantly impacted Reform UK's donations.

The UK Competition and Markets Authority (CMA) has opened formal investigations into Trainline, Virgin Atlantic, and Red Driving School over concerns about 'drip pricing'—displaying misleadingly low prices that exclude mandatory fees. Using new consumer protection powers, the CMA can fine companies up to 10% of global turnover. Trainline shares fell up to 14% following the announcement. This action is part of a broader clampdown on drip pricing, following recent enforcement actions against StubHub and the AA.

Background: A Southern Rail train derailed near Lewes, East Sussex, injuring 20 people and causing line closures. Today: The Rail Accident Investigation Branch's initial report reveals a track geometry irregularity near the derailment site, with reports of rough riding from other trains. Hot, dry weather and a moisture-sensitive clay embankment are potential factors. Network Rail and Greater Thameslink Railway have apologized and will consider recommendations. The irregularity was observed on CCTV from a train passing at 14:04 BST, and several passengers on other trains reported rough riding at that location. The incident occurred during a period of hot, dry weather with temperatures up to 33°C, and the clay embankment is sensitive to moisture changes. The investigation will examine track inspection and maintenance, embankment condition, weather effects, and mitigation measures.

Prime Minister Andy Burnham announced a £442m national campaign to get rough sleepers off the streets by Christmas, framing it as a Covid-style effort. The initiative solidifies homelessness as a central policy, though campaigners warn of a longer-term temporary accommodation crisis. Other developments include a bus services partnership with West Midlands, a response to a text message impersonation incident, and a review of early prisoner release.

A jury at the Old Bailey in London failed to reach verdicts for seven of eight Palestine Action defendants accused of criminal damage and violent disorder over an August 2024 raid on an Elbit Systems factory in Filton, UK. One unnamed individual was convicted of criminal damage by a 9-1 majority. The defendants, who denied charges, may face a retrial, with a hearing set for 14 September. The raid destroyed equipment allegedly destined for Israeli forces, though Elbit denies supplying Israel.