UK Inflation Hits 3.1% as Transport Costs Soar

The UK's inflation rate has increased again, rising to 3.1% in August according to data from the Office for National Statistics (ONS). This is a slight jump from July's 2.9% rate and is attributed to higher transport costs, particularly motor fuels.

The increase comes as a blow to Prime Minister Andy Burnham and Chancellor John Healey ahead of the Budget statement next month on October 28. The Bank of England's Monetary Policy Committee (MPC) are expected by some economists to hike interest rates to four per cent tomorrow.

ONS chief economist Grant Fitzner said 'Sharp price rises for petrol and diesel pushed inflation up again in August.' Higher airfares, particularly for long-haul journeys, also contributed to the increase.