Inflation Soars as Oil Prices Skyrocket Amid Pipeline Disruptions

UK inflation has reached a five-month high due to rising oil prices. Consumer prices rose 3.1% in the year to August, driven by motor fuel costs increasing nearly a quarter.

Petrol now averages 161.3p per litre, while diesel tops out at 181.8p. Brent crude is trading above $100 a barrel, having surged 78% since the start of the year and currently priced at $108 as of Wednesday.

The increase in oil prices has been exacerbated by a recent closure of Saudi Arabia's east-west pipeline following attacks by Iranian-backed militias in Iraq. This may cut global oil supplies by up to 3.6 million barrels per day, equivalent to 3.6% of global demand, according to analysis by Kpler.

Pipelines have become a vital tool for bypassing the Strait of Hormuz, but they can be vulnerable to destruction in conflict zones. Meanwhile, the Red Sea route is under threat from Yemen's Houthi militia, further squeezing energy supplies as winter approaches.