CPI inflation rises to 3.1%

CPI inflation rises to 3.1%

16 Sep 2026

Josh Pilley, Head of Multi-Asset Research at XPS Group, commented:

“Today’s inflation data shows year-on-year CPI in the UK rose from 2.9% in July to 3.1% in August, broadly in line with market expectations. While the headline number contains few surprises, inflationary pressures are likely to remain a concern for households, policymakers and markets.

“Energy costs remain an important driver. Households are already absorbing the 13% increase in the Ofgem price cap that came into effect on 1 July 2026, with a further 4% rise due in October, whilst higher transport costs are also contributing to inflationary pressures across the economy. Rising gilt yields also risk eroding the fiscal headroom available to the Chancellor ahead of next month’s Budget, potentially impacting the funds available to support the Government’s cost-of-living measures.

“Despite the inflationary headwinds, our analysis shows DB pension schemes remain in a strong position above £250 billion as of 10 September 2026, supported by higher gilt yields and equity markets trading near record highs.”