UK inflation accelerates to 3.1% in August as expected on fuel costs

UK consumer price inflation accelerated in August, driven by higher transport costs, while producer price inflation also picked up amid rising oil prices, figures from the Office for National Statistics showed on Wednesday.

The consumer price index rose 3.1% year-on-year in August, accelerating from 2.9% in July and in line with the FXStreet-cited market consensus.

On a monthly basis, consumer prices increased 0.5% in August, compared with a 0.3% rise in the same month a year earlier.

The ONS said transport, particularly motor fuels, made the largest upward contribution to the change in the annual inflation rate.

Core CPI, which excludes energy, food, alcohol and tobacco, rose 2.6% annually in August, unchanged from July, also in line with FXStreet expectations.

The CPI goods inflation rate accelerated to 2.7% from 2.2%, while services inflation remained at 3.4%.

Meanwhile, the consumer prices index including owner occupiers' housing costs, or CPIH, rose 3.3% annually in August, accelerating from 3.1% in July. Core CPIH inflation was unchanged at 2.9%.

Separately, producer price data showed inflationary pressures continued to build for UK manufacturers.

Producer input prices rose 6.1% year-on-year in August, accelerating from a revised 5.8% increase in July and ahead of FXStreet-cited market expectations of a 5.4% rise.

On a monthly basis, input prices increased 0.3%, following a revised 0.8% decline in July.

Crude oil prices rose 27% annually and provided the largest upward contribution to the annual input inflation rate.

Producer output, or factory gate, prices increased 3.7% annually in August, accelerating from a revised 3.3% rise in July. Output prices increased 0.7% month-on-month, following a revised 0.4% increase in July.

Prices for coke and refined petroleum products jumped 49% annually and 8.6% on a monthly basis, providing the largest upward contribution to output price inflation.

The ONS said producer prices continued to be pushed up by the US-Iran war, particularly through crude oil and refined petroleum product prices.

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