UK Inflation Hits Five-Month High, Pressure Mounts on BoE to Hike Rates

Inflation in the United Kingdom has hit a five-month high, rising to 3.1% in August from 2.9% the previous month.

The increase is largely due to higher fuel prices and airfares, according to official figures released by the Office for National Statistics.

Despite this, the Bank of England's Monetary Policy Committee appears unlikely to raise interest rates at their meeting on Thursday, with a majority of members wanting to see if higher prices are feeding into higher wages that could further stoke inflationary pressures.

A soft labor market is currently keeping wage demands in check, said Suren Thiru, chief economist at ICAEW.