The latest figures from the Office for National Statistics said the rise in CPI was mainly due to financial services, miscellaneous household costs and rising rents.
The ONS said housing and household services charges overall rose by 0.4% between June and July this year but were unchanged between the same two months a year ago.
The upward effect was driven by increases in housing rent particularly for social housing provided by registered social landlords.
In last week’s inflation report Bank of England Governor, Mervyn King, said he expected CPI to hit 5% this year and then fall back towards the Bank’s 2% target.
