UK Inflation Jumps to 3.1% as Fuel Prices Bite

UK inflation rose to 3.1% year-on-year in August, according to the Office for National Statistics.

The increase was driven by higher petrol and diesel prices, but core inflation remained steady at 2.6%, while services inflation stayed flat at 3.4%.

Market expectations were met, with no major reaction in the GBP/USD exchange rate, which dipped slightly from around 1.3486 to about 1.3479.

Economist Sanjay Raja from Deutsche Bank noted that the print was 'in line with expectations', and the data does not point to a broadening of price pressures across wages and domestic pricing.