UK CPI inflation rises to 3.1% in the 12 months to August

UK Consumer Prices Index (CPI) inflation rose to 3.1% in the 12 months to August 2026, up from 2.9% in the 12 months to July, the Office for National Statistics (ONS) said on 16 September 2026¹. The Consumer Prices Index including owner occupiers' housing costs (CPIH) rose by 3.3% over the same period, up from 3.1%¹. On a monthly basis, both CPIH and CPI rose by 0.5% in August 2026, compared with a rise of 0.3% in August 2025¹.

The ONS said transport, particularly motor fuels, made the largest upward contribution to the change in the annual rate¹. Prices in the transport division rose by 4.6% in the 12 months to August 2026, up from 3.6% in July, and by 1.5% on the month¹. Motor fuel prices rose by 23.0% over the 12 months to August 2026, compared with 15.5% in July¹. The average price of petrol rose by 9.1 pence per litre between July and August 2026, to 161.3 pence per litre, the highest price recorded since November 2022; diesel rose by 14.2 pence per litre, to 181.8 pence per litre¹. Air fares rose by 6.2% between July and August 2026, against a rise of 2.1% a year earlier, with the upward effect coming from long-haul routes¹.

Core inflation, which excludes energy, food, alcohol and tobacco, was unchanged. Core CPIH rose by 2.9% in the 12 months to August 2026 and core CPI by 2.6%, both unchanged from July¹. The CPIH goods annual rate rose from 2.2% to 2.7%, while the CPIH services annual rate was unchanged at 3.6%¹. The CPI goods annual rate rose from 2.2% to 2.7%, with CPI services unchanged at 3.4%¹.

CPIH annual rate, selected divisions	July 2026	August 2026
All items	3.1%	3.3%
Transport	3.6%	4.6%
Housing and household services	4.1%	4.3%
of which owner occupiers' housing costs	3.7%	3.9%
Food and non-alcoholic beverages	1.3%	1.3%
Alcohol and tobacco	2.5%	2.7%
Communication	5.0%	5.3%

Source: ONS, Table 2¹. MoneyWeek reported housing and household services rising from 4.6% to 4.9% over the same period, which differs from the ONS figures of 4.1% to 4.3%¹.

"The Consumer Prices Index (CPI) rose by 3.1% in the 12 months to August 2026, up from 2.9% the previous month."

Office for National Statistics, Consumer price inflation, UK: August 2026¹

Why it matters for households

Inflation at 3.1% is above the Bank of England's 2% target, and the ONS said the rate rose for a second consecutive month¹. Higher fuel prices feed directly into the cost of running a car, and the August petrol price of 161.3 pence per litre was the highest since November 2022¹. Food and non-alcoholic beverage inflation was 1.3%, unchanged from July and the lowest rate since September 2021, when it was 0.8%¹.

Energy costs are also set to change. MoneyWeek reported that the energy regulator, Ofgem, confirmed energy costs will increase by 4% from October when the latest energy price cap comes into force, lifting the average annual energy bill for a typical dual-fuel household paying by direct debit to £1,723, from £1,663². The same report cited EDF forecasts of the cap rising to £2,165 in January². The ONS said electricity, gas and other fuels prices rose by 0.9% between July and August 2026, giving a 12-month rate of 6.0%, with the effect coming from domestic heating oil and fixed rate gas and electricity¹.

For savers, MoneyWeek reported that one in four savings accounts fail to match the Bank of England forecasts, according to data firm Moneyfacts². The ONS does not report savings rates.

What happens next

The Bank of England's Monetary Policy Committee announces its latest interest rate decision on 17 September 2026². MoneyWeek reported that experts think rates will probably stay held at 3.75%². The ONS's next inflation release is due on 21 October 2026¹. The ONS also said it has identified a minor error in the classification of several products in its scanner-based consumption segments from February 2026¹, and that from 2030 at the earliest, CPIH methods and data sources will be introduced into the Retail Prices Index¹.

Sources2 cited