Petrol and diesel prices have skyrocketed, pushing UK inflation to its highest level in five months as of August. Inflation jumped from 2.9% to 3.1%, according to the Office for National Statistics (ONS). The cost of filling up vehicles soared in August, driven by ongoing conflicts in the Middle East, which have disrupted global oil supplies. It’s no surprise that petrol prices have hit their highest point in nearly four years, while diesel has also seen a significant spike.
During this critical month for summer getaways, airfares surged too, contributing to the overall rise in motor fuel prices, which increased by a staggering 23% compared to August last year. Oil prices have surged past $91 a barrel, up from around $73 just before the outbreak of hostilities earlier this year. The data from ONS reveals that average petrol prices continued to climb, rising by 9.1p to reach 161.3p per litre between July and August.
Everyone knows that bigger rises in inflation are on the way. The increase in crude oil and fuel prices has significantly impacted the annual cost of raw materials, which, in turn, has raised the prices of goods leaving factories. Experts predict that inflation could peak at 4.2% come January. Goran Raven, a local business owner, pointed out that fluctuations in oil prices have a “real-time impact.” He mentioned, “We’ve got lots of pressure on us at the moment. I’d say we’re about 20% down compared to this time last year.”
Raven further explained that they rely on small tanks and require a tanker almost every day, which means they have to pay a daily spot price. “There’s no way around it. We’re not earning much on it. It’s single digits of pence we make per litre,” he lamented. The Bank of England is currently grappling with a 2% inflation target, with interest rates at 3.75%. They’re set to meet on Thursday to discuss potential changes.
Meanwhile, Chancellor John Healey is preparing to announce his first Budget next month, amidst some mixed economic news. Recent figures showed the UK economy expanded by 0.4% in July, buoyed by investments in artificial intelligence. However, for the second quarter between April and June, things were less rosy.
The government is making moves to alleviate some pressure by cutting VAT on household electricity bills from 5% to zero starting October 1, which could save a typical household about £45 a year. However, the price cap on both electricity and gas bills is set to rise by 4%, meaning that households using a typical amount will see their annual energy costs increase by £60.
Yael Selfin, chief economist at KPMG, pointed out that the VAT cut will only partially mitigate the impact of rising gas prices, which have been climbing due to the Iran conflict and disruptions to global supplies, including liquefied natural gas.
For many, like Emma Ashfield, a nursery worker from Northern Ireland raising her eight-year-old daughter, the situation is dire. “Everything is already extremely expensive,” she shared. “You basically need a second job now. I find electricity very pricey… and it’s costly trying to heat my apartment too.”
So, what’s next for the average Brit facing these rising costs? The pressure on households continues to mount as inflation rises. Will there be any relief in sight? We’ll have to stay tuned…
Kaynak: Orijinal Haber