UK Inflation Hits Five-Month High as Iran War Continues to Bite

Inflation in the UK has risen to its highest level in five months, reaching 3.1% in August, according to official figures released on Wednesday.

The increase is largely attributed to rising fuel prices and airfares, which have been exacerbated by the aftermath of the Iran war.

Despite this, rate-setters at the Bank of England are unlikely to raise interest rates immediately, with a majority of the Monetary Policy Committee wanting to see whether higher prices are feeding into higher wages that could further stoke inflationary pressures.

However, economists predict that this development will harden the Bank's hawkish tone and leave the door open to higher rates later in the year.