UK inflation hit 3.2 per cent in the year to August, up from 2 per cent in July – the biggest one-month increase on record.

The Office for National Statistics says this 1.2 per cent jump in the Consumer Prices Index (CPI) is the “largest-ever” increase since the index began in January 1997. Inflation is now the highest it has been since March 2012.

A survey of economists by Reuters predicted inflation for August to be 2.9 per cent, 0.3 per cent lower than expected.