UK inflation has risen to 3.1%, moving further away from The Bank of England’s 2% target.
The increase has been pushed up by the ongoing conflicts in the Middle East and most recently, Houthis’ attacks on Saudi Arabian energy facilities.
The knock-on effect of international tensions has caused UK fuel prices to skyrocket in the last week. Even before this, the average petrol price stood at 161.3p per litre in August, which is the highest ever recorded since November 2022.
Susannah Streeter, Chief Investment Strategist for the Wealth Club, says there is concern for future inflation rates, energy prices and house prices.
She said: “The bigger shift is happening in expectations for the months ahead, with markets now pricing in multiple hikes as the energy shock threatens to keep inflation elevated. That is going to pile on the financial pain for those looking to remortgage or get onto the housing ladder.
“With energy costs rising and borrowing costs looking set to surge higher, there looks set to be a fresh squeeze on spending, so consumers are going to become even choosier about where they spend their available cash.”
The Guardian has reported that the Bank of England are now planning to make a decision on interest rates on Thursday against pressure from soaring oil and gas prices.
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