Burnham Warns of Tough Choices After Inflation Rise

CPI inflation rose to 3.1% in the year to August, up from 2.9% in July, a five-month high and further above the Bank of England's 2% target after a 15-month low of 2.6% in June. Prime Minister Andy Burnham, speaking in Woking as the figures were released, said the government will take difficult decisions to keep the economy on track, will not take risks with living standards, and will apply the highest degree of prudence at the 28 October Budget while factoring in Middle East pressures. Brent crude was $108 a barrel; diesel hit a four-year high; petrol rose 9.1p a litre to 161.3p. Bank rates stood at 3.75%, with a hold widely expected the next day. What is contested: Andy Haldane told LBC markets see a traditional tax-and-spend socialist government with better Tiktok videos and that the government's Achilles' heel is unwillingness or inability to cut spending. Burnham said that does not tell the story, the government is not that, and he has already reprioritised spending including putting digital ID on hold. Unresolved: some put the Budget gap at £10 billion in tax rises or cuts; bond yields were at 28-year highs; some analysts see CPI near 4% in early 2027.