UK inflation jumps to 3.1% as energy costs soar

The U.K.'s annual inflation rate jumped to 3.1% in August, pushed up by surging gasoline and diesel prices.

The print, which was in line with economists' expectations, marked the first inflation reading above 3% since March.

The country's Office for National Statistics (ONS) said that the spike was largely driven by rising motor fuel costs, which surged 23% year-on-year.

The average price of gasoline rose by 9.1 pence ($0.12) per liter between July and August, the ONS said, putting average prices at their highest since Nov. 2022. Meanwhile, average diesel prices rose by 14.2 pence per liter in August.

Inflation rose to 2.9% in July, as a government-regulated price cap on energy costs was revised sharply upward.

Prices are continuing to rise as crude oil prices hover above $100 a barrel. Earlier this week, British motoring body the RAC said petrol and diesel prices had hit, since the Iran war began, with both fuels now at prices not seen in four years.

The U.K., a net importer of energy, is particularly vulnerable to external energy shocks. The country's inflation rate rose to 2.9% in July, as a government-regulated price cap on energy costs was revised sharply upward.

In August, the cost of electricity, gas and other household fuels jumped 6% year-on-year, the ONS said Wednesday.

The U.K. is still grappling with a cost-of-living crisis sparked by post-pandemic inflation and surging energy costs that arose in the wake of Russia's full-scale invasion of Ukraine in 2022.

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