UK inflation rate rises to 3.1% in year to August

The UK inflation rate rose to 3.1 per cent in the year to August.

The latest figures were released on Wednesday morning by the Office for National Statistics (ONS).

Inflation hit 2.9 per cent in July, which was its highest level in four months, after the price of energy was pushed up by the conflict in the Middle East.

Economists had earlier warned that they expected the rate to climb further in August as higher fuel costs and more expensive electronics, linked to chip shortages and the AI boom, pushed up the cost of living.

Inflation measures the increase in the price of goods over time. The Bank of England has set a target of keeping the rate at 2 per cent.

Oxford Economics’ Andrew Goodwin earlier said that he expected the data to show a significant uplift linked to higher petrol and diesel costs for motorists.

“Weekly data from the Department for Energy Security and Net Zero suggests that fuel prices rose 7 per cent month-on-month between July and August, and we expect this to add around 0.2 percentage points to CPI inflation,” he said.

Airfares are also likely to have swung higher in August following weaker pricing in July, with higher jet fuel costs also feeding into ticket prices, analysts earlier said.

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