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2026-09-16 14:14:08
[UK inflation rises to 3.1%, a multi-month high, fuel prices push up, increasing pressure ahead of Bank of England decision] (1) UK inflation climbed for the second consecutive month as fuel prices jumped; official data was released the day before the Bank of England announced its interest rate decision. (2) The UK Office for National Statistics said on Wednesday that consumer prices rose 3.1% year-on-year in August, the highest since March, up from 2.9% in the previous month. The increase was in line with the median forecast of economists, while the Bank of England had previously predicted 2.8%. (3) The acceleration was driven by rising gas station prices due to the ongoing war in Iran; the pound maintained its gains after the data was released. (4) Bank of England officials meeting this week are expected to keep interest rates unchanged, as a weak labor market has so far helped to curb price pressures from the Middle East conflict; however, this stance is becoming increasingly difficult to maintain as the war drags on. (5) UK drivers now face the most expensive diesel and petrol costs since 2022, with prices above $100 a barrel. (6) Bailey also warned that new risks are emerging, particularly in food prices, as extreme drought and the impending El Niño event take effect in the UK.
