UK inflation accelerated in August, adding to concerns over persistent price pressures ahead of the Bank of England’s latest interest rate decision.
UK Inflation Rises to 3.1%
The UK annual inflation rate increased to 3.1% in August, up from 2.9% in July, according to official data released on Wednesday.
The latest figures come just one day before the Bank of England (BoE) is expected to announce its latest monetary policy decision. Markets widely expect the central bank to keep interest rates unchanged.
Energy Prices Push Inflation Higher
Economists surveyed by Reuters had largely expected UK consumer price inflation to rise to 3.1%.
The increase was partly linked to renewed pressure from energy prices. Energy costs climbed as conflict in the Gulf resumed, contributing to stronger overall price growth.
Inflation Exceeds Bank of England Forecast
The August inflation reading also came in above the Bank of England’s previous projection.
In July, the BoE had forecast that annual UK inflation would stand at 2.8% in August. Instead, inflation reached 3.1%, highlighting stronger-than-expected price pressures in the British economy.
The higher inflation reading could remain an important factor for the Bank of England as policymakers assess the future path of UK interest rates.
