UK consumer prices rose 3.1% in the 12 months to August 2026, up from 2.9% in July, according to the ONS. The rise was driven by motor fuels, where petrol and diesel prices fell less steeply than in August 2025, pushing up the annual comparison — a textbook base effect from last summer's fuel price falls.
Fuel drove the headline, services held steady
Transport — primarily motor fuels — accounted for most of the 0.2 percentage-point rise in the overall rate. The ONS noted that petrol prices fell by less than in the same period last year, adding to the contribution from that category.
Services inflation, which the Bank of England watches closely as a gauge of domestic price persistence, remained at 3.4% for the third consecutive month. That steadiness will be more reassuring to policy-setters than the headline rise — it suggests the energy component is doing the driving, not a broad acceleration in the cost of domestically produced services.
CPI vs CPIH: the housing gap widens slightly
CPIH — which includes owner-occupiers' housing costs via imputed rent — rose to 3.3%, 0.2 percentage points above headline CPI. The gap reflects rising private rental prices, which fed through to CPIH via the owner-occupiers' housing cost component. For a full explanation of the difference between the two measures, see our CPI vs CPIH explainer.
Core inflation (CPI excluding food, energy, alcohol and tobacco) held at 2.6% — suggesting the headline move was narrow and energy-driven rather than signalling broad underlying pressure. The same pattern was visible across the euro area and the United States in August, as our cross-country analysis covers in detail.
What to watch in the next release
The ONS publishes September CPI in mid-October. The key question is whether services inflation remains anchored at 3.4% or starts to drift — that is the reading the Bank of England's Monetary Policy Committee will focus on most when it meets in November.