UK inflation expected to have risen in August as cost of living squeeze tightens – business live

Good morning and welcome to our business live coverage. We are about to find out if the UK's cost of living squeeze intensified in August. Official inflation data scheduled to be released at 7am BST is anticipated to indicate that the UK's headline inflation rate increased in August, surpassing the Bank of England's 2% target. Economists predict that the Consumer Prices Index will have increased by approximately 3.1% in August, compared to 2.9% over the past year.

Higher fuel costs, attributed to the surge in oil prices following the start of the Iran war, are anticipated to have exacerbated the cost of living. Petrol and diesel prices are now at their highest point since the conflict initiated, with a visit to the gas station being the costliest since 2022. A surge in inflation may exert additional pressure on UK government borrowing costs, which yesterday reached their highest level since 2007 as the bond market experienced a sell-off.

Britain is not the only country facing this issue, as the average 10-year bond yield for the country also hit a record high yesterday.