Inflation hits five-month high amid soaring cost of war

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INFLATION rose to a five-month high last month on the back of rising fuel prices and air fares, official data revealed today.

The Office for National Statistics said consumer prices index inflation increased to 3.1 per cent in August, up from 2.9 per cent in July, continuing an upward trajectory since striking a 15-month low of 2.6 per cent in June.

Motor fuels contributed significantly, with average petrol prices rising 9.1p per litre and diesel rising 14.2p per litre over the month amid the US-Israel war on the Middle East.

Economists warn that inflation will continue to swing higher over the coming months, with increases in interest rates also predicted.

The Bank of England, which targets 2 per cent inflation, is due to announce its latest interest rate decision tomorrow.

Meanwhile, households face further pressure from rising energy bills, with Cornwall Insight predicting a 4 per cent increase from October, followed by a sharper rise in January.

Chancellor John Healey said Britain’s economy was “proving resilient,” blaming the war for the rise in inflation.

Prime Minister Andy Burnham said the government “will not take risks with people’s living standards” ahead of next month’s Budget, but stressed he was prepared to take “difficult decisions” to keep the economy “on track.”

TUC general secretary Paul Nowak said: “Households are still feeling the pain of [US President Donald] Trump’s illegal war.

“The Prime Minister has rightly been straight out of the blocks with measures to tackle the cost of living.

“But with inflation creeping up because of rising fuel and energy bills — and with a new price cap pushing prices up next month — we need to see more government action to support families through the winter.”

Mr Nowak said it is “time the banks paid their fair share of tax on their mega profits.”

He added: “The money raised would cut energy bills for the majority of households and put cash back into workers’ pockets.”

“Higher interest rates have meant mortgage misery and bigger bills for the rest of us, but the big banks are raking it in.

“Taxing bank profits to cut bills is plain common sense.”

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