UK Inflation Hits Five-Month High Amid Rising Fuel Prices

UK inflation has risen to a five-month high of 3.1% in August, according to official figures released on Wednesday. The increase is largely attributed to rising fuel prices and airfares.

The Office for National Statistics reported that the consumer prices index (CPI) rose from 2.9% in July to 3.1% in August, moving further away from the Bank of England's 2% inflation target.

Rate-setters at the Bank of England are expected to keep the main interest rate at 3.75%, as a majority of the Monetary Policy Committee members want to see whether higher prices are feeding into higher wages that could stoke inflationary pressures.

Suren Thiru, chief economist at ICAEW, stated that August's inflation increase is unlikely to trigger a rate hike tomorrow, but it will probably harden the Bank's hawkish tone and leave the door open to higher rates later this year.