16th September 2026
UK inflation increased again in August, with the Consumer Prices Index (CPI) rising to 3.1%, according to the latest figures from the Office for National Statistics (ONS).
The increase means inflation is now above the 2% target used by the Bank of England, after CPI inflation rose from 2.9% in July to 3.1% in August.
The broader Consumer Prices Index including owner occupiers' housing costs (CPIH) also increased, rising from 3.1% to 3.3% over the same period.
CPI inflation rises to 3.1%
The ONS reported that CPI increased by 3.1% in the 12 months to August 2026, up from 2.9% in July.
On a monthly basis, consumer prices increased by 0.5% in August, compared with a 0.3% increase during August 2025.
The latest figures indicate that price pressures strengthened during the month, with transport costs playing a particularly significant role.
Fuel prices were a major factor
Transport made the largest upward contribution to the monthly change in both the CPI and CPIH annual inflation rates.
The ONS specifically identified motor fuels as a major contributor.
For motorists, this means rising petrol and diesel costs were an important part of the increase in inflation recorded during August.
Fuel prices can have a wider effect on household finances and businesses because transport costs can feed into the cost of moving goods and providing services.
CPIH inflation reaches 3.3%
The CPIH measure, which includes the costs associated with owning and living in one's own home, rose to 3.3% in the year to August.
That compares with 3.1% in July.
CPIH increased by 0.5% during August, compared with 0.3% in August 2025.
The difference between CPI and CPIH reflects the additional housing-related costs included in CPIH.
Core inflation remains unchanged
While headline inflation increased, underlying inflation showed a more mixed picture.
Core CPIH, which excludes energy, food, alcohol and tobacco, remained at 2.9% in the 12 months to August.
This was unchanged from July.
The core CPI measure also remained unchanged, at 2.6%.
Core inflation is closely watched because it removes some of the more volatile components of household spending and can therefore provide another indication of underlying price pressures.
Services inflation remains elevated
The latest figures show a difference between goods and services inflation.
For CPIH:
Goods inflation increased from 2.2% to 2.7%.
Services inflation remained at 3.6%.
For CPI:
Goods inflation increased from 2.2% to 2.7%.
Services inflation remained at 3.4%.
The figures therefore show that goods price inflation accelerated in August, while services inflation was unchanged.
Services inflation remains considerably higher than goods inflation, particularly under the CPIH measure.
What does the latest inflation figure mean for households?
A CPI inflation rate of 3.1% does not mean that every household is experiencing a 3.1% increase in its cost of living.
The inflation rate measures the change in prices across a representative basket of goods and services. Individual households can experience significantly different changes depending on what they buy.
For example, households that drive regularly may have been particularly affected by changes in motor fuel prices during August.
Someone who spends relatively little on transport could experience a different rate of inflation.
The latest figures nevertheless show that prices are continuing to rise, and that the overall rate of increase has moved further away from the Bank of England's 2% inflation target.
What happens next?
The August figures will be closely watched by households, businesses and financial markets.
The increase in headline CPI inflation to 3.1% shows that inflationary pressures have not completely disappeared. At the same time, core CPI inflation remained unchanged at 2.6%, while services inflation also remained unchanged.
This combination means the latest data does not tell a simple story of accelerating inflation across the entire economy. Instead, the August figures show a rise in headline inflation alongside relatively stable measures of underlying inflation.
The next inflation releases will therefore be important in determining whether August represents a temporary increase or part of a more sustained change in the inflation trend.
The bottom line
UK CPI inflation rose from 2.9% to 3.1% in August 2026, while CPIH increased from 3.1% to 3.3%.
Transport, particularly motor fuels, was the largest upward contributor to the monthly change.
At the same time, core inflation remained unchanged, with core CPI at 2.6% and core CPIH at 2.9%. Services inflation also remained unchanged, although it continued to run above goods inflation.
For households, the figures underline the fact that prices are still rising, even though the rate of inflation remains substantially below the exceptionally high levels seen earlier in the decade.
Source: Office for National Statistics, Consumer price inflation, UK: August 2026.
https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/consumerpriceinflation/august2026