UK faces looming cost-of-living crisis as inflation climbs to 3.1% in August

The ONS said consumer price inflation increased to 3.1% in August, reversing a recent low and reflecting sharp rises in petrol, diesel and long-haul airfares. Fuel costs jumped, with petrol averaging 161.3 pence per litre and diesel 181.8 pence, linked to renewed tensions after the US-Iran cease-fire collapse. SNP MP Kirsty Blackman called the figures “bad news” and accused the Labour government of failing to deliver promised bill cuts, warning of a cost-of-living emergency this winter.

Chancellor John Healey attributed part of the pressure to the Middle East war, noting measures such as electricity tax cuts, a £2 bus-fare cap and reduced rates for pubs and venues. Economists expect inflation to keep climbing, potentially reaching almost 4% in early 2027 before easing later. The situation underscores growing strain on UK households amid higher energy, food and transport costs.