The UK’s annual inflation rate rose to 3.1% in August, according to data released by the Office for National Statistics on Wednesday. This marks a significant acceleration from the 2.8% rate recorded in July.
The increase was primarily fueled by a sharp rise in energy prices. Core inflation, which excludes volatile items such as food and energy, climbed to 3.2% from 2.9% in the previous month.
At the individual goods level, the largest contributor to the August jump was energy, with costs surging 7.8% year-over-year compared to a 5.8% increase in July. The cost of gasoline also spiked, rising 9.2% annually, up from a 5.8% increase the prior month.
In contrast, some price pressures eased slightly. Food, drink, and tobacco inflation decelerated to 3.6% from 3.8%. Core services inflation remained unchanged at 3.9%, while clothing and footwear prices dipped by 0.1%, ending a prolonged period of double-digit growth in that sector.
Core inflation ticking up is the real concern here. If services stay sticky, we are in for a long, painful struggle.
Gas prices at 9.2% are brutal. My commute costs have doubled in six months. When does this end?
3.1% feels like a step backwards after all that progress. What is the ONS doing wrong with their methodology?
It is interesting that food inflation actually dropped. Maybe the initial shock has passed, even if energy costs are back up.
Does this mean the Bank of England will have to keep interest rates higher for longer? I’m worried about my mortgage payments.
Another hike in energy bills just as we thought things were stabilizing. This is going to hurt everyday families significantly.