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UK inflation increased to 3.1% in the year to August, marking its highest level in five months and moving further above the Bank of England's 2% inflation target.
The latest figures from the Office for National Statistics (ONS) show that inflation rose from 2.9% in July to 3.1% in August. Higher petrol and diesel prices were among the main factors behind the increase, alongside a sharp rise in airfares during the summer holiday period.
The figures highlight the continued impact of energy costs on households, businesses and transportation.
Motor fuel prices increased by 23% compared with August last year, according to the ONS.
Petrol prices experienced a particularly sharp increase. Between July and August, the average petrol price rose by 9.1 pence per litre, reaching 161.3p per litre.
The ONS said this was the highest recorded petrol price since November 2022, when global energy markets were under significant pressure following Russia's full-scale invasion of Ukraine.
Diesel prices also recorded substantial increases during August, adding to the costs faced by motorists and businesses that depend heavily on road transport.
The rise in UK fuel prices has come as global oil markets have been affected by continuing disruption to supplies linked to conflict in the Middle East.
Oil prices climbed above $91 a barrel during the period covered by the latest inflation figures, compared with roughly $73 before the hostilities began earlier in the year.
More recently, Brent crude, the global oil benchmark, has moved above $100 a barrel, increasing concerns about how long the pressure on fuel prices could continue.
Higher crude prices generally feed into petrol and diesel costs, although the effect on consumers can vary depending on refining costs, taxes, exchange rates and retail margins.
The increase in oil prices is affecting not only motorists but also petrol station operators.
Small independent forecourts can be particularly exposed to rapid changes in wholesale prices because they often have limited storage capacity and need to replenish fuel frequently.
One Essex petrol station owner told the BBC that business was around 20% lower than the same period last year, while describing fuel margins as extremely narrow.
For smaller retailers, sudden movements in oil prices can therefore create pressure on both operating costs and customer demand.
Despite the rise in fuel costs, not all parts of the economy experienced the same inflationary pressure.
Food and drink inflation remained comparatively subdued, at 1.3% in the year to August, according to the figures cited in the report.
However, economists have warned that higher energy and transportation costs can take time to work their way through the wider economy.
Businesses facing more expensive fuel, electricity, gas and transportation may eventually pass some of those additional expenses on to customers through higher prices.
Paul Dales, chief UK economist at Capital Economics, said the effects of higher oil and gas prices could become more widespread as businesses absorb increased energy costs.
He estimates that inflation could eventually reach 4.2% in January, although that is an economic forecast rather than an official projection.
The latest inflation figures put additional focus on the Bank of England, whose target is to keep inflation at 2%.
The bank's interest rate was 3.75% at the time of the report, with policymakers due to meet to consider whether changes are necessary.
Higher inflation can complicate decisions on interest rates. Keeping rates higher for longer can help reduce inflationary pressure, but it can also increase borrowing costs for households and businesses.
The latest increase therefore comes at a sensitive time for UK economic policy.
For households, rising petrol and diesel prices have an immediate effect on the cost of driving.
But the impact can extend beyond the forecourt. Road freight, deliveries, public transport and other services can all be affected by changes in fuel costs.
If companies face higher transportation and energy bills, some may eventually increase prices for goods and services.
This creates the possibility of a second-round effect in which an initial increase in oil prices contributes to broader inflation.
For now, the ONS data suggests that the strongest immediate pressure is concentrated in areas such as motor fuel and air travel rather than being evenly distributed across the consumer economy.
The inflation increase comes against a mixed economic backdrop.
The UK economy expanded by 0.4% in July, with investment in artificial intelligence contributing to growth. However, economic growth during the second quarter of the year slowed to 0.4%, compared with 0.6% in the first quarter.
The latest inflation figures add another challenge as policymakers attempt to balance price stability with economic growth.
For consumers, the immediate concern remains the rising cost of fuel and its potential impact on household budgets.
The direction of global oil prices will be an important factor in determining how inflation develops over the coming months.
If crude prices remain elevated, petrol and diesel costs could continue putting upward pressure on the UK's inflation rate. Businesses may also gradually pass higher energy and transportation expenses through to consumers.
At the same time, weaker demand or easing energy prices could reduce some of that pressure.
The August figures demonstrate how quickly international developments in energy markets can affect prices in the UK. With inflation already above the Bank of England's target, movements in oil and fuel prices are likely to remain closely watched by policymakers, businesses and households.
