UK Inflation Hits 3.1% as Fuel Prices Jump 23% on Iran War Shock
Updated
Updated · The Guardian · Sep 16
UK Inflation Hits 3.1% as Fuel Prices Jump 23% on Iran War Shock
3 articles · Updated · The Guardian · Sep 16
Summary
August CPI rose to 3.1% from 2.9%, putting inflation back above 3% and adding pressure on households and the Bank of England before Thursday’s rate decision.
Motor fuel prices surged 23%, lifting average petrol prices by 9.1p to 161.3p a litre and diesel by 14.2p to 181.8p, while air fares rose 6.2%.
Underlying price pressures were steadier: services inflation held at 3.4% and core inflation at 2.6%, as official data also showed slower wage growth and higher unemployment.
Markets still expect the BoE to hold at 3.75%, but see a one-in-five chance of a quarter-point hike this week and at least four increases to 4.75% next year.
Oil above $108 a barrel after intensified Middle East fighting has already pushed the ECB to raise rates and could drive UK inflation close to 4%, complicating next month’s budget.