UK Inflation Rises to 3.1% in August as Energy Costs Surge
Published / Last Updated on 16/09/2026
A 0.5 percentage‑point rise in CPI over just two months is significant, reflecting the broad impact of sharply higher oil prices feeding through into transport, housing, and wider supply‑chain costs.
| Category | Jul‑26 | Aug‑26 | Change |
|---|---|---|---|
| Transport | 3.6% | 4.6% | +1.0% |
| Housing & household services | 4.6% | 4.9% | +0.3% |
| Communication | 5.0% | 5.3% | +0.3% |
| Alcohol & tobacco | 2.5% | 2.7% | +0.2% |
| Recreation & culture | 1.4% | 1.6% | +0.2% |
| Miscellaneous goods & services | 2.7% | 2.9% | +0.2% |
| Restaurants & hotels | 4.0% | 4.1% | +0.1% |
| Food & non‑alcoholic beverages | 1.3% | 1.3% | 0.0% |
| Health | 3.7% | 3.7% | 0.0% |
| Education | 5.1% | 5.1% | 0.0% |
| Furniture & household goods | 1.0% | 0.8% | ‑0.2% |
| Clothing & footwear | 0.5% | 0.2% | ‑0.3% |
Transport delivered the largest monthly increase, driven by fuel costs. Housing and household services, communication, education, and hospitality also remain major contributors to overall inflation.
By contrast, clothing, footwear, and household goods continue to exert downward pressure. Consumers appear to be cutting discretionary spending in these areas to offset rising costs elsewhere.
The Bank of England will announce its latest interest rate decision tomorrow. With the European Central Bank and US Federal Reserve already tightening policy, the BoE would typically follow—especially in the face of rising inflation.
However, the domestic backdrop is more fragile. UK employment data has softened, unemployment is edging higher, and government borrowing costs have risen sharply. These conflicting pressures leave the Monetary Policy Committee (MPC) facing a finely balanced call.
Bank of England Rate Decision: 17 September 2026
Next ONS UK Inflation Report: 21 October 2026
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