UK inflation hits five-month high at 3.1% ahead of BoE decision

UK inflation rose to a five-month high of 3.1% in August, driven by surging motor fuel and airfare costs, intensifying pressure on households and the Bank of England ahead of its interest rate decision. The Office for National Statistics reported that the Consumer Prices Index increased from 2.9% in July, moving further above the central bank's 2% target. The rise was largely anticipated by economists, but its magnitude exceeded the Bank of England's own July forecast of 2.8%. ONS chief economist Grant Fitzner attributed the increase to sharp price rises for petrol and diesel, with the average price of petrol jumping 9.1 pence per litre between July and August to 161.3 pence per litre. Diesel prices rose by 14.2 pence per litre to 181.8 pence per litre. Higher airfares, particularly for long-haul journeys, also contributed, with a 6.2% monthly increase. The inflation data arrives just one day before the Bank of England's Monetary Policy Committee announces its latest policy decision on Thursday. The central bank is widely expected to hold interest rates at 3.75%, despite the uptick in price growth.