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Financial markets predict one-in-five chance of quarter-point rise in interest rates when Bank of England decides on Thursday
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UK inflation has returned above 3% as soaring fuel and transport prices triggered by the Iran war heap renewed pressure on British households.
Figures from the Office for National Statistics show inflation as measured by the consumer prices index rose from 2.9% in July to 3.1% in August. The increase, which matched City forecasts, was driven by motor fuel prices rising by almost a quarter.
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