AI Revolution & West Asia War Set To SKYROCKET Inflation In UK | Explained

Livemint

Published16 Aug 2026, 04:54 PM IST

UK consumer price data due this Wednesday is expected to show inflation accelerating for the first time in four months, with economists predicting a rise to 2.9% in July. The Iran war is pushing up aviation fuel and household energy costs, while the AI boom is driving higher memory chip prices that are already feeding into smartphones, laptops and gaming consoles. The Bank of England has warned that AI-related chip cost pressure could become a structural feature of inflation. With resilient GDP growth and a still-tight labour market, rate-setters are growing uneasy. Upcoming jobs data and global developments, including Fed minutes and Canada-US tariff talks, add to the pressure. Watch the full analysis of what’s driving UK prices higher and what it means for interest rates.