UK August Headline Inflation Rises to 3.1%, Driven by Energy Costs
| Pair | Now | Since publish |
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| GBPUSD | — | — |
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- UK August inflation rose to 3.1% on energy costs.
- Core inflation remained steady at 2.6% in August.
- Forecasts: UK inflation to hit 3.4% next month, 3.6-3.7% winter.
The United Kingdom’s annual Consumer Price Index (CPI) increased to 3.1% in August, up from 2.9% in July, aligning with economists’ expectations. This marks the first instance of headline inflation surpassing the 3% threshold since March. The primary catalyst for this acceleration was a significant rise in energy prices, particularly motor fuels, with petrol prices increasing by 9.1 pence per litre and diesel by 14.2 pence per litre during the month. In contrast, the core CPI remained stable at 2.6%, also meeting forecasts. This inflation report precedes a critical interest rate decision by the Bank of England later this week, with rising energy costs and broader geopolitical tensions in the Middle East contributing to inflationary pressures.
New analysis suggests UK headline inflation could reach 3.4% in next month’s data and potentially 3.6-3.7% over the winter, driven by an anticipated 3-4% rise in petrol and diesel prices through September. The previously reported August inflation figure of 3.1% was in line with market forecasts.