UK Inflation Rises to 3.1% in August as Core Rate Holds Steady

Official ONS figures show UK CPI inflation climbed from 2.9% in July to 3.1% in August 2026, leaving it more than a full percentage point above the Bank of England’s 2 per cent target.

UK inflation hit 3.1 per cent in the 12 months to August 2026, the Office for National Statistics confirmed on 16 September 2026 — up from 2.9 per cent in July and still well clear of the Bank of England’s 2 per cent target. The Confederation of British Industry posted the figures on the same day, noting that core CPI, which strips out energy, food, alcohol and tobacco, held at 2.6 per cent for the fourth consecutive month.

Services inflation came in at 3.4 per cent in August, with CPIH services inflation slightly higher at 3.6 per cent. The figures show the headline rise was linked to energy prices rather than broad-based acceleration — core inflation didn’t budge. That unchanged core rate suggests the jump from 2.9 to 3.1 per cent was driven by more volatile components rather than a general pick-up in underlying price pressure.

For Kent households, the picture is familiar but uncomfortable. Energy and transport costs remain the sharpest pressure points — commuters travelling on the county’s motorway network or relying on local transport will feel any sustained rise in fuel and energy prices directly. Food and non-alcoholic beverages were running at 1.3 per cent annual inflation as of July 2026, which offers some relief at the checkout, but household budgets overall remain stretched.

Local businesses face a double squeeze. Rising input costs eat into margins while consumers — already watching their spending — may pull back further if prices stay high. Kent councils and local advice services could see growing demand from residents seeking support.

The Bank of England, which sets the Bank Rate currently at 3.75 per cent, uses inflation data as a central input to its monetary policy decisions. With CPI remaining above target and core inflation showing no sign of easing, the figures give policymakers little reason to loosen policy quickly. Whether August marks a temporary spike or the start of a renewed upward trend won’t become clear until the September data arrive.