PM warns budget will be tough as UK inflation rises to 3.1%
UK inflation rose to 3.1% in August, driven by fuel costs, as the PM says the budget will be challenging and rate rise looms.
The Full Story
A plain summary built from the channels that reported this story.
UK inflation rose to 3.1% in the year to August, up from 2.9% in July, according to the Office for National Statistics. The increase was driven largely by higher fuel costs, with petrol and diesel prices at their highest for four years, and by rising airfares. The conflict in the Middle East, particularly the war in Iran, has pushed oil and gas prices higher, and economists expect inflation to keep rising, possibly above 4% next year.
The Bank of England is due to announce its interest rate decision tomorrow. While most analysts expect rates to be held for now, markets anticipate rises later in the year as inflation remains well above the 2% target. The US Federal Reserve has already raised its benchmark rate for the first time in over three years.
Prime Minister Andy Burnham acknowledged the budget next month will be challenging, saying the government will not take risks with living standards. He pointed to measures such as cutting VAT on electricity bills and capping bus fares, and highlighted a £500m investment by McLaren as a sign of confidence. Shadow Chancellor Andro Gritis accused the government of making families pay for Labour's choices.
There are growing concerns about the cost of living. Fuel prices have pushed up transport costs, household energy bills are set to rise, and mortgage rates are under upward pressure. A former Bank of England chief economist, Andy Haldane, accused the government of being a "traditional tax and spend socialist government with better TikTok videos", highlighting worries about public borrowing and spending.
On screen
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Key Claims
Claims reported during this story's coverage, mapped by channel. Ordered by how many channels carried each claim.
| Claim | Channel 5 | BBC News | BBC One | BBC Two | Channel 4 | GB News | ITV | Sky News |
|---|---|---|---|---|---|---|---|---|
| Inflation rose to 3.1% in August from 2.9% in July. | · | |||||||
| Markets expect the Bank of England to hold interest rates for now. | · | · | · | · | ||||
| Fuel prices were the main driver of the inflation rise. | · | · | · | · | · | |||
| Economists predicted inflation could reach 4% as energy costs rise. | · | · | · | · | · | · | ||
| Fuel prices have risen, with crude oil up 25% since August and petrol up 9p a litre in August. | · | · | · | · | · | · | ||
| The Bank of England was expected to announce its interest rate decision the following day. | · | · | · | · | · | · | ||
| Petrol prices reached their highest level in nearly four years. | · | · | · | · | · | · | · | |
| The energy price cap will rise for millions of households at the start of next month. | · | · | · | · | · | · | · | |
| The inflation figure was reported to affect supermarket bills and interest rate decisions. | · | · | · | · | · | · | · | |
| The Prime Minister said tough choices were being made to ease the cost of living. | · | · | · | · | · | · | · | |
| The US Federal Reserve raised interest rates for the first time in over three years to curb inflation. | · | · | · | · | · | · | · | |
| Transport fuel costs rose 4.6%, household energy costs rose 4.9%, and communications costs rose 5.3%. | · | · | · | · | · | · | · |
Channel Perspectives
What each channel focused on, with key quotes.
Sky News focused on the political response to the inflation rise, particularly the Prime Minister's admission that the budget will be challenging, and the implications for interest rates. It provided detailed analysis of oil and gas markets, linking the Middle East conflict to fuel prices, and highlighted the government's attempts to show resilience through measures like the VAT cut on electricity bills.
- “Inflation has risen again up to three point one percent in August from two point nine percent in July”
- “It is going to be challenging because the picture around the world is challenging”
- “We won't take risks with people's living standards or with the economy as a whole”
Channel 4 focused on the economic impact of rising inflation, with particular attention to energy security and gas storage. It reported on warnings from the energy industry that the UK has only days of gas storage, and highlighted how the war in Iran is driving up costs for businesses and households. The channel also covered the US Federal Reserve's rate rise and the potential consequences for the UK.
- “Inflation is now rising at 3.1% a year.”
- “Energy prices driven higher by the war in Iran are the main culprit.”
- “Are we going into this winter with almost no days' storage? Yeah, we are.”
BBC TWO's Politics Live treated the inflation rise as a political and economic challenge, featuring panel discussion and analysis from the Deputy Economics Editor. It highlighted the government's vulnerabilities, including a stinging critique from former Bank of England economist Andy Haldane, and discussed the budget pressures facing the Chancellor.
- “The market now suspects that this is a traditional tax and spend socialist government with better TikTok videos.”
- “We saw petrol prices, diesel prices at the pump in August driving this increase in inflation”
- “Economists are saying that we could see inflation heading up towards 4%”
5 News at Lunchtime gave a concise report, focusing on the official figures, the contribution of petrol prices, and the likely influence on the Bank of England's interest rate decision. It included a short soundbite from the Prime Minister about difficult decisions.
- “Inflation has risen to 3.1 per cent according to the latest figures from the Office for National Statistics.”
- “The Prime Minister insists tough choices are being made to ease the cost of living.”
BBC ONE West provided comprehensive coverage, including consumer impact at petrol stations, detailed economic analysis, and political reaction. It reported on the US Fed rate rise, the Prime Minister's warning about the budget, and the challenges facing the Chancellor. The coverage also included Andy Haldane's criticism and the government's defence.
- “It's at the forecourt that you'll find the answer to why inflation is up yet again.”
- “It is going to be challenging because the picture around the world is challenging.”
- “The fiscal Achilles heel of this government thus far has been its unwillingness and or inability to cut public spending.”
ITV1 focused on the consumer impact, with reports from Romford Market and interviews with shoppers. It highlighted rising petrol costs, the pressure on mortgages, and warned of a "grim" outlook. The channel also covered the Prime Minister's acknowledgment that the budget will be challenging, and analysed the tough choices on tax and spending.
- “Everything is just going up. I mean one of the main things like petrol prices is just absolutely skyrocketing.”
- “It is going to be challenging because the picture around the world is challenging.”
- “High debt, high borrowing costs. If the government wants to spend a lot more money it shouldn't be looking to more borrowing.”
BBC NEWS (Verified Live) provided a straightforward news report similar to BBC One, focusing on the inflation rise, the drivers (fuel and airfares), and the Bank of England's upcoming decision. It included the Prime Minister's response and a market analysis suggesting rates may rise later this year.
- “Rising fuel prices and the increasing cost of airfares have pushed the rate of inflation up.”
- “The market's pretty split, honestly, as to whether it will raise interest rates by 0.25% or leave interest rates where they are.”
GB News gave the inflation story relatively brief treatment, but used it to criticise the government, linking it to wider political issues. The channel quickly moved to the Piddington referendum and asylum seeker housing, with a strong editorialised tone. It quoted the Prime Minister's response but framed it as part of a broader political narrative.
- “rises in petrol diesel and airfares have pushed UK inflation up now to its highest level in five months in the year to August.”
- “The only thing to do is to get the numbers down the number of crossings down and they are now at a seven year low”
Broadcast Timeline
News broadcasts tracked for this story, in time order.