FX.co ★ UK Inflation Rate Accelerates in August

The UK’s annual inflation rate increased to 3.1% in August 2026, its highest level in five months, matching market expectations and up from 2.9% in July. Transport costs made the largest upward contribution, with inflation in this category rising to 4.6% from 3.6% in July, driven mainly by higher motor fuel prices. Petrol prices rose by 9.1 pence per litre over the month to 161.3 pence, while diesel prices climbed 14.2 pence to 181.8 pence, pushing motor fuel inflation up to 23.0% from 15.5%.

Inflation also accelerated in several other categories: housing and household services (4.9% vs 4.6%), communication (5.3% vs 5.0%), and recreation and culture (1.6% vs 1.4%). Food inflation was unchanged at 1.3%.

Core CPI inflation remained steady at 2.6%, with goods inflation rising to 2.7% from 2.2%, while services inflation was unchanged at 3.4%. On a monthly basis, consumer prices increased by 0.5%, the largest rise in four months, in line with forecasts and up from 0.3% in July.