UK Inflation Hits Five-Month High Amid Fuel Price Pressures

The UK's inflation rate has reached its highest point in five months, rising to 3.1% in August from 2.9% the previous month.

The increase is largely attributed to higher fuel prices and airfares, which will put further pressure on the Bank of England to raise interest rates.

However, rate-setters are expected to keep the main interest rate at 3.75% for now, as they wait to see if higher prices translate into higher wages that could stoke inflationary pressures.

Suren Thiru, chief economist at ICAEW, believes the increase will harden the Bank's hawkish tone and leave the door open to higher rates later this year.