UK Inflation Hits 3.1% as Fuel Prices Climb

UK inflation rose to 3.1% in August, up from 2.9% in July, driven by higher fuel prices that pushed the rate above the Bank of England's target.

The consumer prices index increased 0.5% on a monthly basis, with transport costs making the largest contribution to the increase in annual inflation.

However, underlying measures were more stable, with core CPI remaining at 2.6% and services inflation unchanged at 3.4%, while goods inflation increased from 2.2% to 2.7%.

The Bank of England is set to make its latest interest rate decision on Thursday, with current rates standing at 3.75% after the Monetary Policy Committee voted six to three in July to leave borrowing costs unchanged.