Inflation across OECD economies accelerated in August as a sharp rise in energy costs pushed prices higher, while falling food inflation provided some relief and underlying price growth remained comparatively steady.
Inflation across the OECD increased to 4.3% in the year to August 2026, up from 4.1% in July, according to the latest figures from the OECD. Prices rose in 23 of the 37 countries with available data, with energy costs emerging as the main source of renewed pressure. The increase comes as Britain and other major economies face significantly higher fuel and household energy prices, although core inflation has remained broadly stable.
Energy costs drive the latest increase
Energy prices across the OECD were 13.6% higher in August than a year earlier, accelerating from an 11.6% annual increase in July.
The rise was widespread, with 28 OECD countries recording faster energy inflation. Australia, Belgium, Denmark, Italy, Spain and Türkiye were among those experiencing particularly pronounced increases.
The contrast with underlying inflation is significant. Core inflation, which excludes food and energy prices, remained at 3.6% for a third consecutive month.
That suggests the latest acceleration is being driven primarily by energy rather than a broad-based resurgence in underlying price pressures.
Food prices provided a degree of relief. OECD food inflation slowed from 3.2% in July to 2.8% in August, its lowest rate since July 2021.
UK inflation also moves higher
Britain is already seeing substantial pressure from rising fuel and energy costs.
UK consumer price inflation increased from 2.9% in July to 3.1% in August, while CPIH rose from 3.1% to 3.3%.
The country’s core CPI rate remained at 2.6%, indicating that underlying inflation was considerably less elevated than the headline figures might suggest.
Motorists have faced particularly strong increases. Average petrol prices reached 161.3p a litre in August, their highest level since November 2022, while diesel climbed to 181.8p.
Motor fuel prices were 23% higher than a year earlier, making transport one of the clearest areas where the energy shock has been felt by households.
Household energy costs also increased, with electricity, gas and other household fuels 6% more expensive than a year earlier.
Businesses face higher costs too
The pressure is not limited to consumers.
UK producer input prices increased by 6.1% in the year to August, while output prices charged by manufacturers rose by 3.7%.
Crude oil was among the major contributors, with input prices 26.7% higher than a year earlier.
Higher energy and fuel expenses can work their way through the wider economy as businesses face increased costs for transportation, manufacturing, production and other services.
Transport prices in Britain were 4.6% higher annually in August, with motor fuels making the largest contribution. Air fares also increased during the month.
G7 inflation remains comparatively stable
Across the G7 group of advanced economies, annual inflation edged up from 3% in July to 3.1% in August.
However, energy inflation accelerated sharply, reaching 14%.
Every G7 country except Japan recorded double-digit annual energy inflation. Japan was the exception, with government subsidies helping push energy prices below their level a year earlier.
Food prices, meanwhile, moved in the opposite direction. G7 food inflation fell to 1.9%, its lowest level since October 2024.
The decline helped counter some of the impact of more expensive energy in several major economies, although the UK and France did not record a fall in food inflation.
Eurozone faces sharper September acceleration
The euro area also experienced an increase in inflation, with the rate rising from 3% in July to 3.2% in August.
Energy inflation in the currency bloc reached 14.3%, the highest level since January 2023, while food and core inflation remained broadly unchanged.
Early figures from Eurostat indicate that the situation intensified further in September.
The preliminary estimate puts eurozone inflation at 3.8%, which would be the bloc’s highest annual rate since September 2023 and represents a 0.6 percentage-point increase in just one month.
Energy prices were again responsible for much of the acceleration. Preliminary data indicates annual energy inflation of 18.8% in September, while core inflation remained around 2.5%.
The divergence between headline and underlying inflation therefore remains pronounced.
G20 inflation also increases
The wider G20 group recorded inflation of 4.1% in August, compared with 3.9% in July.
India saw one of the largest increases, with its inflation rate rising by 0.4 percentage points to 5%.
China and Indonesia both recorded increases of 0.3 percentage points, taking their respective rates to 0.8% and 3.2%.
Argentina and Brazil recorded declines, while inflation in Saudi Arabia and South Africa was broadly unchanged.
The latest figures underline the uneven nature of the current inflationary episode, with energy costs producing significantly greater pressure than food or underlying prices in many economies.
