UK consumer inflation rose for a second consecutive month in August as vehicle
fuel jumped, adding pressure on the Bank of England ahead of its policy
decision. The ONS said CPI rose 3.1% YoY in August, the highest since March and
up from July’s 2.9%; the print matched economists’ median and exceeded the BoE’s
prior 2.8% projection. The acceleration was driven by higher petrol and diesel
prices linked to the ongoing Iran-related Middle East conflict; global oil is
trading above $100/bbl and UK pump prices are at their most expensive since
2022. Sterling held gains after the release. BoE officials meeting this week are
expected to keep rates unchanged, citing a weak labor market that has so far
contained spillovers; Governor Bailey warned that a prolonged conflict, UK
drought and an imminent El Nifio could raise food-price risks.
