{"text":[[{"start":0,"text":"UK inflation accelerated to 3.1 per cent in August, worsening the squeeze on households and businesses and keeping open the prospect of a Bank of England rate increase this year."}],[{"start":19.04,"text":"Wednesday’s figure from the Office for National Statistics was above July’s 2.9 per cent reading and in line with the prediction of economists polled by Reuters."}],[{"start":28.84,"text":"Rising petrol prices were the major driver of August’s increase, with higher household energy bills also contributing, the ONS said."}],[{"start":37.24,"text":"The increase takes inflation further above the BoE’s 2 per cent target as the Monetary Policy Committee prepares to set its key interest rate on Thursday. Economists and traders expect the MPC to hold its rate at 3.75 per cent, but signal that an increase in borrowing costs could come as soon as its November meeting."}],[{"start":56.88,"text":"Despite the energy shock from the Iran war, the MPC has resisted lifting interest rates as officials await further evidence on whether higher inflation is becoming entrenched in the economy."}],[{"start":67.94,"text":"The MPC voted 6-3 to hold rates at its last meeting in July, exposing deep divisions on how to respond to surging oil and gas prices."}],[{"start":76.92,"text":"Yael Selfin, chief economist at KPMG, said rising energy prices were likely to test the BoE’s “wait-and-see approach” on rates."}],[{"start":85.56,"text":"“The MPC will be wary of a prolonged period of above-target inflation feeding into significant wage changes and price-setting behaviour,” she said. “There is little evidence of that occurring so far, but without a marked improvement in the outlook, the balance of risks could shift towards a rate rise before the end of the year.”"}],[{"start":102.92,"text":"The steep rise in global energy costs has prompted the European Central Bank to raise borrowing costs twice since June, while traders are betting the Federal Reserve will later on Wednesday lift interest rates for the first time since 2023."}],[{"start":116.88,"text":"The blistering rally in oil prices poses a significant political challenge to Prime Minister Andy Burnham, who was swept into Downing Street by Labour MPs on the back of a promise to ease the cost of living for voters."}],[{"start":129.12,"text":"But a steep rise in government bond yields is estimated to have more than halved the government’s fiscal headroom, limiting the scope for giveaways in the October Budget."}],[{"start":137.88,"text":"Despite the pick-up in headline inflation, Wednesday’s data suggested that the spillover of energy prices into the wider economy remained limited — a key point for those MPC members who have voted to hold rates since the Middle East conflict began in February."}],[{"start":153.04,"text":"Services inflation, closely watched by rate-setters as a gauge of domestic price pressures, held steady at 3.4 per cent in August, below economists’ expectations of 3.5 per cent. Core inflation, which excludes energy and food, remained at 2.6 per cent during the month."}],[{"start":171.56,"text":"Francesco Pesole, strategist at ING, said there was “still no evidence that inflationary pressures are spreading beyond energy [prices]”, which “gives BoE doves something to cling on tomorrow”."}],[{"start":183.56,"text":"Official figures on Tuesday underlined the continued weakness of the jobs market and subdued wage growth."}],[{"start":190.36,"text":"Following the release of the August inflation data, traders continued to expect a string of rate increases over the coming year, but dialled back their expectations on the pace. They also cut bets on a move at this week’s meeting from 35 per cent to 15 per cent."}],[{"start":205.76,"text":"Two-year gilt yields, which are more sensitive to changing interest rate expectations, fell 0.14 percentage points to 4.76 per cent. The pound slipped 0.3 per cent against the dollar to $1.344."}],[{"start":219.76,"text":"Responding to August’s figures, chancellor John Healey said: “The war in the Middle East is impacting on inflation worldwide, not just here at home. In our bills, our weekly shop and at the petrol pumps. We have taken early action to help families and give businesses breathing space.”"}],[{"start":238.24,"text":"Andrew Griffith, shadow chancellor, took aim at the government for August’s increase, saying: “Inflation is now at 3.1 per cent, meaning that every family is paying the price for Labour’s choices.”"}],[{"start":249.6,"text":"Economists cautioned that the expected acceleration in headline inflation in coming months could prompt the MPC to raise rates later this year, even if officials resist making further increases."}],[{"start":259.76,"text":"CPI inflation is now expected to hit or exceed 4 per cent by early next year — double the BoE’s target."}],[{"start":265.32,"text":"Andrew Goodwin, UK economist at Oxford Economics, said August’s figures offered “no evidence that second-round effects are emerging”, but added that “the pick-up in external price pressures has been so great that it looks increasingly likely to force the MPC’s hand”."}],[{"start":282.04,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1789606210_9757.mp3"}