UK Inflation Hits Highest Level Since March as Fuel Prices Soar

Inflation in the UK rose to its highest level since March last month due to surging fuel prices. The Office for National Statistics (ONS) reported that Consumer Prices Index (CPI) inflation increased to 3.1% in August, from 2.9% in July.

The largest single driver of inflation was fuel prices, which jumped after the breakdown of the US-Iran ceasefire pushed oil prices higher. The price of petrol rose by 9.1 pence per litre between July and August, to an average of 161.3 pence per litre, its highest level since 2022.

Economists predict that inflation will continue to rise in the coming months, adding pressure on households ahead of the autumn Budget in October. Pantheon Macroeconomics forecast that inflation will rise to 'about 4.5% in January' as energy pressures hit households and businesses.