The Bank expects inflation will settle down to just above its 2% target in two years' time as it gradually increases interest rates.
The figures prompted the transport secretary, Chris Grayling, to announce rail fare rises, which are linked to July's RPI, of 3.2%.
United Kingdom inflation rose to 2.5% in July, according to the Office for National Statistics, up from 2.4% in the previous month.
Average house prices in the United Kingdom increased by 3 per cent in the year to June, the slowest rate since August 2013, according to data from the Office of National Statistics.
The price of a typical United Kingdom house is now around £228,400, a £1,000 increase on the previous month.
It, however, measured the CPI at 13.95 per cent in the period under review, showing 0.42 per cent point lower from 14.37 per cent recorded in June.
Tej Parikh, an economist at the Institute of Directors, an employers group, warned that the rising cost of fuel would feed into higher utility bills, squeezing low and middle income family budgets the most.
"This is likely to weigh down consumer spending, posing fresh problems for embattled high street businesses", Parikh said. "Despite the truckers' strike, food inflation eased considerably in July 2018, benefiting from the base effect", she said. The CPI has risen 0.9% since the start of 2018 and 1.4% over the past 12 months, still within the government's target range for annual inflation of between 1% and 3%.
On a seasonally adjusted basis, average house prices in the United Kingdom were unchanged between May 2018 and June 2018, compared with an increase of 0.5 per cent in average prices during the same period a year earlier.
The average United Kingdom house price was £228,000 in June - £1,000 higher than in May and £6,000 higher than in June 2017. Years of steady house price hikes have created huge affordability issues for first-time buyers, so the fact that annual house price growth has fallen to its lowest point in five years will be a welcome change for many.
"This measure of core inflation fell in 10 of the 12 regions of the United Kingdom".
"The fall is instead explained by more non-sale price decreases and fewer price increases".
The rise in inflation was partly due to the increased cost of video games in the United Kingdom, as well as higher transport fares.