UK consumer price inflation rose to 3.1% in the 12 months to August 2026, up from 2.9% in July, according to the Office for National Statistics bulletin released on 16 September. Prices rose 0.5% on the month, compared with 0.3% in August 2025.
What happened
The ONS said transport made the largest upward contribution, adding 0.69 percentage points to the annual rate, with motor fuels doing most of the work. Fuel prices were 23.0% higher than a year earlier, up from 15.5% a month before. The average petrol price reached 161.3 pence per litre, 9.1 pence more than in July and the highest since November 2022, while diesel averaged 181.8 pence per litre, up 14.2 pence.
Underlying measures were calmer. Core CPI, which leaves out energy, food, alcohol and tobacco, was 2.6% for a second month, and services inflation was unchanged at 3.4%. Goods inflation rose to 2.7% from 2.2%.
Why it matters for traders
The release landed the day before the Bank of England's rate decision, which is a good example of how scheduled data and central bank meetings cluster together. When two high-impact events sit within 24 hours of each other, the period between them can see unusual positioning: some traders reduce exposure, liquidity can be uneven, and the reaction to the second event may be shaped by how the first was received.
For sterling pairs and UK index CFDs, the most useful habit is to look past the headline. A rise caused largely by fuel prices has different implications from one driven by wages or services, and central banks pay attention to that distinction. If you trade around the release, expect wider spreads at the moment of publication and consider how much slippage your stop orders could tolerate.
What to watch
- The next ONS inflation bulletin and the monthly breakdown of services and goods.
- Oil and wholesale gas prices, which feed into fuel costs with a delay.
- Bank of England communications on whether energy-led inflation is spreading to wage setting.
Sources
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