Andy Burnham has warned that 'difficult decisions' lie ahead in next month's budget after UK inflation climbed above 3%, driven by rising energy prices linked to the Iran war.
Key facts
- UK inflation rose to 3.1% in August, up from 2.9% in July.
- Soaring fuel prices, triggered by the Iran war, drove the increase.
- Andy Burnham warned of 'difficult decisions' in next month's budget.
- The prime minister rejected a claim that he leads a 'tax-and-spend' government.
- The Bank of England is preparing for an interest rates decision.
UK inflation rose to 3.1% in August, up from 2.9% in July, as soaring fuel prices pushed the headline rate above 3%, according to the Guardian. The increase was attributed to rising energy costs stemming from the Iran war and the worsening damage the Middle East conflict is inflicting on the global economy.
Andy Burnham has said that ‘difficult decisions’ will need to be taken in next month’s budget in response to the rising cost pressures. The warning comes as households face a fresh blow to living standards amid the broader economic fallout from the conflict.
The prime minister rejected a claim that he leads a ‘tax-and-spend’ government, according to the Guardian, pushing back against characterisations of his fiscal approach ahead of the budget.
The rise in inflation was driven largely by higher fuel prices, which official figures showed were the main factor lifting the rate from July to August. The Guardian reported that these price increases were triggered by the Iran war.
The Bank of England is preparing for an interest rates decision, with the latest inflation figures forming part of the economic backdrop to that judgement. Higher inflation typically factors into decisions on the direction of interest rates.
The developments add to pressure on households already grappling with the effects of the Middle East conflict on the wider economy, setting the stage for a closely watched budget next month.
Why it matters
Rising inflation directly affects household budgets by pushing up the cost of everyday essentials, particularly energy and fuel. With the government signalling 'difficult decisions' ahead and the Bank of England weighing interest rates, the coming budget could shape living standards for millions.
Frequently asked questions
How much did UK inflation rise in August?
UK inflation rose to 3.1% in August, up from 2.9% in July, according to the Guardian.
What caused the increase in inflation?
The rise was driven by soaring fuel prices triggered by the Iran war and the worsening damage to the global economy from the Middle East conflict.
What did Andy Burnham say about the budget?
Burnham said 'difficult decisions' will need to be taken in next month's budget following the rise in inflation.