UK Inflation Hits Six-Month High as Petrol Prices Soar

The UK's inflation rate has reached its highest level in six months, rising to 3.1% in August from 2.9%, according to the Office for National Statistics (ONS). The main contributor to this increase was a surge in petrol and diesel prices, which rose by 23% compared to August last year.

The conflict in the Middle East has continued to disrupt global oil supplies, driving up oil prices to over $91 a barrel. This has led to average petrol prices increasing by 9.1p to 161.3p per litre, the highest price recorded since November 2022.

Capital Economics' chief UK economist, Paul Dales, estimates that inflation will peak at 4.2% in January due to a combination of higher oil and gas prices and businesses passing on their increased energy costs.