{"id":772539,"date":"2026-09-16T13:30:11","date_gmt":"2026-09-16T13:30:11","guid":{"rendered":"https:\/\/www.newsbeep.com\/uk\/772539\/"},"modified":"2026-09-16T13:30:11","modified_gmt":"2026-09-16T13:30:11","slug":"uk-inflation-rises-to-5-month-high-further-pressuring-bank-of-england-to-raise-rates","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/uk\/772539\/","title":{"rendered":"UK inflation rises to 5-month high, further pressuring Bank of England to raise rates"},"content":{"rendered":"

LONDON — Inflation in the United Kingdom rose to a five-month high as the aftershocks of the Iran war<\/a> continued to ratchet up fuel prices, official figures showed Wednesday, an increase that will pressure the Bank of England<\/a> to hike interest rates again over coming months.<\/p>\n

The Office for National Statistics said rising prices at the pump and airfares were largely behind the increase in the U.K.\u2019s consumer prices index to 3.1% in August from 2.9% the month before. The increase moved inflation further away from the Bank of England\u2019s 2% inflation target.<\/p>\n

However, rate-setters are widely expected to keep the bank\u2019s main interest rate at 3.75% when they conclude their meeting on Thursday as a majority of the nine-member Monetary Policy Committee appear to want to see whether higher prices are feeding into higher wages that could further stoke inflationary pressures. A soft labor market is currently keeping wage demands in check.<\/p>\n

\u201cAugust\u2019s inflation increase is unlikely to trigger a rate hike tomorrow, as policymakers will take some comfort from a cooling jobs market,\u201d said Suren Thiru, chief economist at ICAEW. \u201cHowever, it will probably harden the Bank\u2019s hawkish tone and leave the door open to higher rates later this year.\u201d <\/p>\n

Interest rates in the U.K. had been trending downward from a 15-year high of 5.25% until the U.S. and Israel attacked Iran in late February. The Iran war led to sharp increases in oil and gas prices, partly because the crucial Strait of Hormuz<\/a> has been largely closed to traffic ever since. <\/p>\n

As well as impacting the cost of personal loans and mortgages, the uptick in interest rate expectations is a growing problem for the British government as the servicing of its debt accounts for a higher proportion of its spending.<\/p>\n

Prime Minister Andy Burnham insisted the British economy is still showing \u201cresilience across the board\u201d and that next month\u2019s annual budget statement would take a prudence-first approach.<\/p>\n

\u201cWe won\u2019t take risks with people\u2019s living standards or with the economy as a whole,” he said.<\/p>\n","protected":false},"excerpt":{"rendered":"LONDON — Inflation in the United Kingdom rose to a five-month high as the aftershocks of the Iran…\n","protected":false},"author":2,"featured_media":772540,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[84,74619,1346,59,232,57,58,1431,164199,50,56,54,55,231],"class_list":["post-772539","post","type-post","status-publish","format-standard","has-post-thumbnail","category-united-kingdom","tag-business","tag-consumer-prices","tag-financial-services","tag-gb","tag-general-news","tag-great-britain","tag-greatbritain","tag-inflation","tag-iran-war","tag-news","tag-uk","tag-united-kingdom","tag-unitedkingdom","tag-world-news"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/772539","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=772539"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/772539\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/772540"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=772539"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=772539"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=772539"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}