PwC comments on ONS CPI data - August 2026

Commenting on the latest Office of National Statistics Consumer Price Index August 2026 data, Adam Deasy, Economist at PwC UK, says:

“With ongoing escalation of conflict in the Middle East, the impact of previous disruption is still feeding through into UK prices. August’s increase in CPI inflation to 3.1% comes largely off the back of energy price increase.  
 
“The Bank of England has a difficult task, balancing a worsening external price shock against a domestic economy sending mixed signals. Oil prices are now above $100 a barrel, similar to the most adverse of the three scenarios the Bank of England set out in July; gas prices are currently exceeding that scenario’s assumptions. But while inflationary pressures build, the UK’s labour market continues to weaken, suggesting some areas of growing fragility in the economy. At the same time, July GDP has surprised to the upside. 
 
“That leaves the Bank in wait-and-see mode, but with less room for comfort. Monetary policy won’t shift the energy markets, nor the machinations of global geopolitics, but it may prevent inflation becoming embedded in wages and prices. That’s what the Bank will be watching for and where it’s probably too soon to say.”