Middle East escalation drives UK inflation to five-month high

UK inflation rose to 3.1% year on year in August, marking its sharpest increase in five months and up from 2.9% in July, according to a report by the country’s Office for National Statistics (ONS).

Higher transport costs, particularly a renewed increase in fuel prices amid fresh escalation in the Middle East, were the main driver of consumer price growth.

The price of petrol rose by £0.09 to an average of £1.61 ($2.17) per litre, while diesel increased by £0.14 to £1.81 ($2.44). Airfares also rose by 6.2%.

Annual core inflation, which excludes changes in food, alcohol, tobacco and energy prices, remained at 2.6% in August, while services inflation rose to 3.2%.

“Sharp price rises for petrol and diesel pushed inflation up again in August. Higher airfares, particularly for long-haul journeys, also contributed to the increase,” ONS Chief Economist Grant Fitzner said.

He added that “rising crude oil and petrol prices increased both the annual cost of raw materials and the price of goods leaving factories respectively.”

By Jeyhun Aghazada