UK Inflation Hits 3.1% Amid Fears of Further Increases from Middle East Crisis

UK inflation rose to 3.1% in August, exceeding expectations and sparking fears of further increases due to the ongoing Middle East energy crisis.

The sharp rise was driven by higher prices for petrol, diesel, and airfares, particularly for long-haul journeys. Transport costs accounted for most of the increase in inflation this year.

Oil costs have been running at extremely high levels, with Brent Crude hitting $108 a barrel. This has led to soaring energy bills, with estimates suggesting they could rise by up to 25% in January.

The Bank of England's Monetary Policy Committee is set to make its latest decision on interest rates tomorrow, but most predict that it will hold them at 3.75% this time.