Petrol and diesel price rises push UK inflation higher
Summer holidays and disruption to global oil supplies by the Middle East conflict stoked price growth.
Petrol and diesel prices surged in the UK, contributing to a rise in overall inflation to 3.1% in August, the highest level in five months. The conflict in the Middle East disrupted global oil supplies, causing petrol prices to hit their highest in nearly four years and diesel prices to soar. Motor fuel prices rose by 23% compared to last year, with average petrol prices climbing to 161.3p per litre, the highest since November 2022.
While the impact on food and drink inflation remains at 1.3%, Capital Economics anticipates further inflationary pressures, with estimated inflation peaking at 4.2% in January. Higher oil prices affect forecourt businesses, many of which are seeing reduced customer traffic. The Bank of England's inflation target of 2% is now surpassed.
Chancellor John Healey acknowledged the impact of the Middle East war on inflation, while the government prepares to announce its first budget. The upcoming VAT cut on household electricity bills, set to take effect in October, aims to provide relief for some families, though energy prices are expected to continue rising.
Written by urgent.news from BBC Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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