UK Inflation Jumps Above Projections on Soaring Fuel Costs

UK inflation rose to 3.1% in August, matching forecasts and outpacing the Bank of England's projections, according to data released on Wednesday by the Office for National Statistics.

The increase was driven by higher fuel costs, with transport prices rising 4.6% in the year to August and motor fuel prices increasing 23.0% over the same period.

Deutsche Bank Chief UK Economist Sanjay Raja noted that headline inflation was 0.25 percentage points above the Bank of England's forecast, while services inflation was 20 basis points above projections.

Raja said private rents rose 0.49% in August, their biggest increase since November 2024, and catering prices rose 0.45%, their highest increase since February.