UK Inflation Surges to 3.1% Amid Fuel Price Soars

UK inflation rose to 3.1% in August, driven by soaring fuel and transport prices triggered by the Iran war.

The Office for National Statistics reported a 0.2 percentage point increase from July's 2.9%, with motor fuel prices rising by almost a quarter.

Average petrol prices rose to 161.3p per litre, the highest level since November 2022, while diesel prices reached 181.8p per litre.

The Bank of England is set to make a crucial decision on interest rates this Thursday against a backdrop of rising inflationary pressures from soaring oil and gas prices.

Bond markets have been thrown into turmoil, with intense selling pressure pushing the yield on US government bonds above 5% for the first time since 2023.