UK inflation rises as fuel costs complicate Bank of England rate decision

UK consumer prices were 3.1% higher in August than a year earlier, up from 2.9% in July and the fastest pace in five months. The increase came mainly from transport, especially pricier petrol and diesel, while household energy costs added to the pressure. That distinction matters: fuel and energy can push the headline rate up quickly, even when the more persistent parts of inflation are relatively steady. The Bank of England now has to judge whether an inflation rate still well above its 2% target is a temporary energy shock or a reason to keep borrowing costs tight for longer.