ONS · Consumer Price Inflation, UK · August 2026 · Released 16 September 2026 · Damian Pudner
Inflation climbs to 3.1% as fuel costs bite again
CPI rose to 3.1% in the 12 months to August, up from 2.9% in July and the second consecutive increase. CPIH rose to 3.3%, up from 3.1%. The largest single push came from motor fuels, up 23.0% on the year after the biggest one-month jump in pump prices since 2022. Core inflation held at 2.6%, but goods inflation rose to 2.7% while services inflation remained at 3.4%.
3.1%
CPI — 12m to August 2026
Up from 2.9% in July
2.6%
Core CPI — 12m to August
Unchanged from July
23.0%
Motor fuels — 12m to August
Up from 15.5% in July
Key Points
CPI rose to 3.1% in the 12 months to August 2026, up from 2.9% in July, the second consecutive increase and the highest rate since March 2026. CPIH rose to 3.3%, up from 3.1%. On the month, both CPI and CPIH rose 0.5%, against a 0.3% rise in August 2025.
Motor fuels drove the increase. Petrol rose 9.1p a litre to 161.3p, the highest price since November 2022. Diesel rose 14.2p to 181.8p. Motor fuel inflation jumped to 23.0% from 15.5% in July, and transport was the largest single contributor to the change in the annual rate.
Core inflation held at 2.6%, unchanged from July, but the stability is doing more work than it looks. Goods inflation rose to 2.7% from 2.2%, the highest since September 2025, while services inflation was flat at 3.4%. Goods have stopped being the disinflationary force they were for most of the year.
Housing costs kept climbing. CPIH housing and household services rose to 4.3% from 4.1%, with owner occupiers' housing costs up to 3.9% from 3.7% — a third consecutive monthly rise, following sixteen consecutive falls.
Air fares jumped again, up 6.2% on the month against a 2.1% rise a year earlier, with long-haul routes doing the damage. The ONS again points to disruption linked to the conflict in the Middle East, now into its seventh month.
UK inflation is now above France and Germany. At 3.1%, CPI is above the final HICP rates for France (2.6%) and Germany (2.9%) for August.
CPI and CPIH 12-month inflation rate
UK, August 2025 to August 2026 · 2% CPI target shown; CPIH is not the target measure
Source: ONS, Consumer price inflation, UK: August 2026, Table 1. Monthly series, August 2025 to August 2026.
CPI 12-month rate by division
Division
July 2026
Aug 2026
Direction
Transport
3.6%
4.6%
▲
Housing & household services
4.6%
4.9%
▲
Communication
5.0%
5.3%
▲
Misc. goods & services
2.7%
2.9%
▲
Alcohol & tobacco
2.5%
2.7%
▲
Restaurants & hotels
4.0%
4.1%
▲
Recreation & culture
1.4%
1.6%
▲
Health
3.7%
3.7%
—
Education
5.1%
5.1%
—
Food & non-alc. beverages
1.3%
1.3%
—
Furniture & household goods
1.0%
0.8%
▼
Clothing & footwear
0.5%
0.2%
▼
CPI all items
2.9%
3.1%
▲
Source: ONS, Consumer price inflation, UK: August 2026, Table 3. Transport made the largest upward contribution to the change in the annual rate.
Commentary
This is the second month running that the headline rate has surprised on the upside, and the story is different from July's. July was an energy story: the Ofgem price-cap reset did the damage. August is a pump story. Petrol is at its highest price since November 2022, diesel is up 14.2p a litre in a single month, and motor-fuel inflation has gone from 15.5% to 23.0% in four weeks. Two consecutive months of externally driven increases is starting to look less like noise and more like a pattern.
The core rate held at 2.6%, and on the surface that looks reassuring. It isn't, quite. Goods inflation rose from 2.2% to 2.7%, its highest since September 2025, while services inflation stayed flat at 3.4%. If goods keep climbing while services fail to ease further, the core stops holding and starts rising, and that is a materially worse story for the MPC than the one implied by "core unchanged."
Owner occupiers' housing costs rose to 3.9% from 3.7%, a third straight monthly increase after sixteen consecutive falls. That is a domestic source of inflation sitting underneath the more visible energy and fuel story, and it is not going away on its own.
The international comparison undercuts any comfortable "it's a global energy shock, everyone has this" reading. The UK's 3.1% is now above the final HICP rates for France (2.6%) and Germany (2.9%). Britain is running hotter than both.
Why It Matters
The Bank Rate decision lands tomorrow, 17 September, at 12pm, and today's data removes most of the doubt about the outcome. GBTT expects a hold at 3.75%. Rate has sat there since April, and this is the second consecutive month in which inflation has come in above where the MPC would like it heading into a decision. At the last vote, on 30 July, the Committee split 6–3 to hold, with Megan Greene, Catherine Mann and Huw Pill all preferring a rise to 4.00%; no member voted to cut.
The July Monetary Policy Report had CPI on a path toward roughly 3.2% in the fourth quarter of 2026. Today's 3.1% is broadly consistent with that projection rather than a break from it, which is the main reason this is not yet a full reassessment moment. GBTT's standing call remains a 25-basis-point cut by year-end, but that call carries more risk with every print that comes in at or above forecast. A third consecutive upside surprise in the September data, due 21 October, would put it under serious pressure.
Tomorrow's announcement also carries the Bank's annual review of quantitative tightening, setting the pace of balance-sheet reduction for October 2026 to September 2027. The current programme runs down the gilt stock by £70bn a year, of which £21bn is active sales. The Bank is widely expected to trim that total for the coming year. GBTT's view is that with the long end already straining to absorb this year's supply, the Committee should pause the active-sales programme rather than press on with a smaller cut.
GBTT's calls this week: a hold at 3.75%, a 25-basis-point cut still the central case by year-end, and a pause to active gilt sales rather than a smaller cut to the QT envelope.
What To Watch
Households
Pump prices are doing the damage this month. Diesel above 180p a litre and petrol above 160p both feed straight into transport costs for anyone who drives to work, on top of the energy-bill increase still working through from July. There is no equivalent relief on the horizon this time.
The Bank
Whether tomorrow's hold comes with a vote split like July's, or whether the hawks pick up support after two straight upside surprises. Watch the October and November prints against the MPR's 3.2% Q4 projection: broadly on track keeps the stance intact, an overshoot changes the conversation.
The Treasury
September's CPI, published 21 October, is the reference figure for uprating working-age benefits next April. Another elevated reading would mean a larger welfare uprating, adding to the Chancellor's spending pressures weeks before the Budget.
Next Release: Consumer Price Inflation, UK: September 2026 — 21 October 2026, 7:00am.
This is the second month running that the headline rate has surprised on the upside, and the story is different from July's. July was an energy story: the Ofgem price-cap reset did the damage. August is a pump story. Petrol is at its highest price since November 2022, diesel is up 14.2p a litre in a single month, and motor-fuel inflation has gone from 15.5% to 23.0% in four weeks. Two consecutive months of externally driven increases is starting to look less like noise and more like a pattern.
The core rate held at 2.6%, and on the surface that looks reassuring. It isn't, quite. Goods inflation rose from 2.2% to 2.7%, its highest since September 2025, while services inflation stayed flat at 3.4%. If goods keep climbing while services fail to ease further, the core stops holding and starts rising, and that is a materially worse story for the MPC than the one implied by "core unchanged."
Owner occupiers' housing costs rose to 3.9% from 3.7%, a third straight monthly increase after sixteen consecutive falls. That is a domestic source of inflation sitting underneath the more visible energy and fuel story, and it is not going away on its own.
The international comparison undercuts any comfortable "it's a global energy shock, everyone has this" reading. The UK's 3.1% is now above the final HICP rates for France (2.6%) and Germany (2.9%). Britain is running hotter than both.