UK inflation accelerated to 3.1 per cent in August, adding to pressure on households and businesses and prompting renewed political arguments over the causes of rising prices.
The Consumer Prices Index increased from 2.9 per cent in July, according to the Office for National Statistics. The rise was driven in significant part by higher motor fuel prices, while increased airfares also contributed.
The Conservatives blamed the acceleration on higher business costs, including the increase in employer National Insurance contributions, as well as Labour’s energy policies.
Andrew Griffith, the shadow chancellor, said: “Inflation is now at 3.1%, meaning that every family is paying the price for Labour’s choices. Labour’s jobs tax and employment red tape are being passed on to consumers in the weekly shop, and their mad energy policies are pushing up costs and leaving Brits exposed. In difficult times, we need a serious government with a plan, not amateurs with a bunch of pet projects.”
Retailers warned that businesses were already facing significant cost pressures, with the government’s forthcoming Autumn Budget offering an opportunity to address them.
Harvir Dhillon, lead economist at the British Retail Consortium, said: “Tackling the cost of living is a top priority and retailers continue to do all they can to hold prices down. But until fiscal conditions improve, they will be fighting with one hand tied behind their back.
“The Autumn Budget is a chance to reset and reduce the cost pressures building up across the industry. Business rates are perhaps the most significant of these, with retailers paying a disproportionate share of the total rates bill.”
Unite general secretary Sharon Graham also urged ministers to intervene, arguing that households were facing mounting costs across energy, mortgages and other essentials.
“After a decade that has seen prices rise by 40 per cent, workers are sick of paying for crises they did not cause. Energy bills are set to be the highest they’ve been in three years, while the privatised profiteers rake in billions. Mortgage rates are spiking while the banks make money hand over fist.
“The government needs to step in. It can start by unfreezing the tax thresholds to put more money in workers’ pockets. At the same time, take back energy profits to subsidise household and industrial bills.”
Grant Fitzner, ONS chief economist, said: “Sharp price rises for petrol and diesel pushed inflation up again in August.
“Higher airfares, particularly for long-haul journeys, also contributed to the increase.”
Petrol prices rose by 9.1p a litre between July and August to an average of 161.3p, while diesel increased by 14.2p to 181.8p.
The increase in fuel costs came as oil and gas prices were affected by renewed tensions following the breakdown of the US-Iran ceasefire in July, adding to concerns that inflationary pressures could persist into the autumn.
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