UK Inflation Hits Five-Month High Amid Rising Energy Costs
UK inflation accelerated to a five-month high of 3.1% in August from 2.9% in July, according to official figures released on Wednesday. The increase was in line with economists' expectations, who predicted that consumer price inflation would speed up due to rising energy costs.
The Bank of England had forecast in July that annual inflation would stand at 2.8% in August, but the actual figure came in higher than expected. Despite this, policymakers are likely to focus on underlying measures of price growth, which were stable in August.
Core inflation, which excludes volatile items such as food and fuel, held steady at 2.6% for a fourth consecutive month. Inflation in Britain's services sector also remained unchanged at 3.4%, reflecting wage growth and longer-term inflation pressures.
The news comes ahead of the Bank of England's interest rate decision on Thursday, with investors giving a one-in-three chance of a quarter-point hike.