UK Inflation Expected to Surge to 3.1% Amid Energy Price Pressures
The UK's inflation rate is expected to accelerate to 3.1% year-over-year in August, up from 2.9% in July, driven by higher energy prices, according to a report. This increase comes as the consequences of the conflict in the Middle East continue to feed through to UK energy costs.
The Office for National Statistics will publish the Consumer Price Index (CPI) data on Wednesday at 06:00 GMT, which is one day before the Bank of England's decision on interest rates. The central bank is expected to keep its policy rate unchanged at 3.75%, but another acceleration in price pressure could strengthen expectations of an interest rate hike in the coming months.
Core inflation, which excludes energy, food, alcohol, and tobacco components, is also expected to accelerate to 2.7% year-over-year from 2.6% previously. This increase in both headline and core inflation could fuel concerns at the Bank of England about persistent price pressure.