BoE Decision Tomorrow as UK Inflation Hits 3.1%
UK inflation rose to 3.1% in August, matching market expectations and surpassing the 3% threshold ahead of the Bank of England's decision tomorrow.
The acceleration was driven primarily by transport prices, particularly motor-fuel inflation, which jumped from 15.5% to 23.0%. Petrol prices increased by 9.1 pence per litre during August, while diesel rose by 14.2 pence.
Annual goods inflation consequently climbed from 2.2% to 2.7%, its highest rate since September 2025. However, underlying measures, such as core CPI and services inflation, remained stable, with core CPI holding at 2.6% below the 2.7% consensus.
The data presents a less hawkish picture than the headline increase alone suggests, reinforcing concerns of the BoE's hawkish members but leaving little room for a dovish signal tomorrow.