Fuel Costs Drive Expected Rise in UK Inflation
The UK's inflation rate is expected to rise in August due to higher fuel costs linked to the conflict in the Middle East and increased electronics prices, according to analysts. The Office for National Statistics will reveal the latest Consumer Prices Index (CPI) inflation rate on Wednesday.
A consensus of economists predicts that inflation rose to 3.1% in August from 2.9% a month earlier, following a 15-month low of 2.6% in June. Higher oil and gas prices since the US-Iran ceasefire deal collapsed on July 8 are expected to contribute to this increase.
Andrew Goodwin from Oxford Economics said that fuel prices rose 7% month-on-month between July and August, adding around 0.2 percentage points to CPI inflation. Airfares are also likely to have increased in August due to higher jet fuel costs.