UK inflation rises again in August 2026, with CPI at 3.1%
UK annual CPI inflation rose to 3.1% in August 2026, while CPIH reached 3.3%, according to ONS data. Both rates increased for a second consecutive month, reversing part of the easing seen earlier in the year.
UK annual consumer price inflation accelerated for a second consecutive month in August 2026, extending the reversal of the easing seen between March and June. The Office for National Statistics reported a 12-month Consumer Prices Index (CPI) rate of 3.1%, up from 2.9% in July. CPIH inflation rose to 3.3% from 3.1%.
Both annual rates increased by 0.2 percentage points between July and August. These changes describe an acceleration in inflation measured against a year earlier, rather than the increase in prices during August alone. The two measures therefore give a consistent signal on the direction of annual inflation, although they do not establish whether price pressures strengthened across individual spending categories.
The recent history puts that acceleration in perspective. CPI inflation fell from 3.3% in March to 2.6% in June, while CPIH eased from 3.4% to 2.8% over the same period. Both subsequently increased in July and August. August's readings remained below March's, but the renewed rise means the earlier moderation had partly unwound. The six-month record supports a recent rebound in annual inflation, not a claim that a lasting upward trend has become established.
CPIH includes owner occupiers' housing costs and council tax, which CPI excludes. Its annual rate remained above CPI in August, as it did throughout March to July. That difference matters when assessing household cost pressures, but the headline comparison alone does not identify housing as the driver of August's acceleration.
Renewed pressure on purchasing power
The economic signal is less favourable for household purchasing power than June's lower inflation rates. Prices were rising faster relative to a year earlier, increasing the income growth needed to keep pace with the measured cost of consumption. For households whose nominal incomes fail to match those increases, the result would be reduced purchasing power and less room for real spending.
That does not mean household spending necessarily weakened in August: the outcome also depends on income growth and households' ability to adjust saving or borrowing. The narrower conclusion is that the inflation figures show renewed pressure on budgets, rather than continued relief from a steadily declining annual rate.
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