August UK inflation report expected to show rising inflation

The UK Office for National Statistics (ONS) is set to release the Consumer Price Index (CPI) data for August on Wednesday at 06:00 GMT, which could impact the British Pound (GBP) due to its release occurring just before the Bank of England's monetary policy decision on Thursday. The UK CPI is expected to rise to 3.1% year-on-year in August, from 2.9% in July, surpassing the Bank of England's 2% target.

Core inflation, excluding volatile energy, food, alcohol, and tobacco components, is anticipated to accelerate to 2.7% year-on-year from 2.6%. This acceleration in headline and core inflation could raise concerns about persistent price pressure at the Bank of England. Rising energy costs due to the Middle East conflict and further increases in the energy price cap from October could exacerbate inflationary pressures.

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