Inflation climbs to 3.1%

UK inflation rose to 3.1% in August from 2.9% in July. The increase matched economist predictions but signals the start of a worrying trend.

Oil hits $108 a barrel

Brent Crude reached $108 per barrel this morning. The surge is driven by deepening Middle East crisis and threatens further price increases.

Diesel at four-year high

Drivers are already feeling the pinch at the pumps. Diesel prices have climbed to their highest level in four years.

Energy bills could jump 25%

Estimates suggest household energy bills could rise by a quarter in January. The increase would add significant pressure to family budgets.

Inflation may hit 4% next year

Some analysts now predict CPI will reach 4% in 2027. Markets are pricing in multiple interest rate increases to combat rising prices.

Bank decision due tomorrow

The Monetary Policy Committee will announce its latest rate decision tomorrow. Most expect the Bank to hold fire this time despite inflation pressures.

Gas prices climbing since July

Gas prices have been ticking higher since the US-Iran ceasefire deal collapsed on July 8. The breakdown has destabilized energy markets.

Petrol and diesel drive inflation

Sharp price rises for petrol and diesel pushed inflation up in August. Higher airfares, particularly for long-haul journeys, also contributed.

“Sharp price rises for petrol and diesel pushed inflation up again in August.”

Factory costs rising too

Rising crude oil and petrol prices increased both the cost of raw materials and the price of goods leaving factories. The impact ripples through the economy.

Government struggling with Budget

Ministers are struggling to find ways of balancing the books at next month's Budget. Tax increases and spending cuts are both on the table.

Healey blames Middle East war

John Healey said the Middle East war is impacting inflation worldwide. He pointed to effects on bills, weekly shopping and petrol pumps.

“The war in the Middle East is impacting on inflation worldwide, not just here at home.”

Government offers limited relief

The government has cut tax on electricity bills, capped bus fares at £2 and lowered rates for pubs and live music venues. But relief measures remain modest.

Jobs market shows weakness

Numbers on company payrolls fell by 26,000 last month. Payrolls are now down 145,000 over the past year.

Job vacancies at five-year low

Vacancies tumbled to a fresh five-year low in the three months to August. Around 8,000 fewer jobs were advertised compared to the same period in 2025.

Wages barely beat inflation

Private sector regular wage growth was 2.9%, barely keeping ahead of inflation. Workers are seeing minimal real-terms pay increases.

Economy shows resilience despite crisis

Despite serious global uncertainty, Healey said the UK economy is proving resilient. The government maintains its determination to deliver growth in every postcode.