- Prime minister Andy Burnham has pledged that the Government will not take risks with living standards in the upcoming autumn Budget, following news that CPI inflation increased to a five-month high of 3.1% in August.
- Official figures from the Office for National Statistics show the rise from 2.9% in July was primarily driven by sharp increases in petrol and diesel prices, as well as higher long-haul airfares linked to Middle East conflict.
- The prime minister stressed that he is prepared to take “difficult decisions” on the economy to ensure that it “remains on track”.
- Economists warn that inflation is on a renewed upward trajectory and could peak near 4% in early 2027, driven by supply chain pressures and anticipated 4% increases in household energy bills from October.
- While the Bank of England is widely expected to hold interest rates at 3.75% during its upcoming decision, analysts predict that future rate hikes remain probable as inflation moves further away from the 2% target.
