UK Inflation Hits 3.1%, Fueling Rate Hike Expectations

UK inflation accelerated to 3.1% in August, exceeding the Bank of England's 2% target and increasing expectations that policymakers may need to consider a rate increase later this year.

The rise in consumer price growth was driven by higher petrol and household energy prices, which added pressure on household and business budgets.

Services inflation held steady at 3.4%, while core inflation remained at 2.6%. The data sharpens policy focus ahead of the Bank of England's September rate decision, with most economists expecting rates to remain unchanged but anticipating a potential hike by November.