Inflation came in at 2.2% in August, unchanged from July, according to new figures from the Office for National Statistics (ONS).
Measured by the Consumer Prices Index (CPI), the largest upward contribution to inflation came from air fares, which rose this year but fell a year ago; the largest offsetting downward contributions came from motor fuels, and restaurants and hotels.
Core inflation, meanwhile, which takes out volatile factors like energy, food, alcohol and tobacco to give a clear picture of underlying trends, was 3.6% in the 12 months to August 2024, up from the 3.3% in July.
Martin Sartorius, Principal Economist, CBI, said: “Inflation has fallen short of the Bank of England’s latest forecast expectations for the second month in a row. This will be welcomed by households and businesses, although they will still be feeling the pinch from three years of elevated costs growth.
“While the Bank’s Monetary Policy Committee will be reassured by today’s data, they’re likely to remain wary of loosening policy too quickly. Inflation is expected to pick up later this year and domestic price pressures, such as wage growth, still pose an upside risk to the outlook. That should result in a gradual path for interest rate cuts going forward, with rates likely to stay unchanged this month.”
