Cheese Monger Specialist Cheese Shop interior, Monster Cheese Mongers, East Dalwich, London, UK, UK.
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According to data released by the National Bureau of Statistics (ONS) on Wednesday, the UK’s annual inflation rate was stable at 3.8%.
Economists voted by Reuters had expected inflation to reach 3.8% from 12 months to August.
Core inflation in August, which excludes more volatile energy, food, alcohol and tobacco prices, fell 3.6% per year from 3.8% in 12 months to 3.8%.
“Airfare costs are the leading driver this month, and prices rose a year ago following a massive increase in July related to the timing of summer holidays,” ONS chief economist Grant Fitzner said on the X social media platform.
“This was offset by rising prices at the pump and lower costs for hotel accommodations than last year.”
Food price inflation has risen for the fifth consecutive month, ONS notes, with slight increases in the vegetable, cheese and fish range.
Data comes after the consumer price index occurred in July after it exceeded forecasts and exceeded forecasts.
Finance Minister Rachel Reeves commented that “families feel it is tough and they perceive it as a lot of economies feel stuck. So I am determined to cut costs and support people facing higher bills.”
Pound Sterling was slightly lower at $1.3637 against the dollar after data release.
The Bank of England is closely monitoring inflation data after predicting that the consumer price index could peak at 4% in September before retreating in early 2026.
The central bank said it would cut interest rates in August, raise the key rate from 4.25% to 4%, and approach monetary easing “gradually and carefully” and noted inflationary pressures, but recognized the need to promote growth and investment.
It will next be held on Thursday, but there is no expectation of fee adjustments this month, and there is uncertainty about whether the cuts will be possible in November.
Sticky Inflation is limiting opportunities for the fourth rate by BOE this year. Scott Gardner, investment strategist at Nutmeg, the digital wealth manager owned by JP Morgan, commented Wednesday.
“Wage growth has declined in recent months, but more progress is needed on the inflation front to convince bank policymakers that further interest rate reductions are possible in the current economic environment.
“The cost of living for household finances will continue for the coming months, with forecasts suggesting that inflation will increase further in the short term and could reach 4% in the fall,” Gardner said, adding, “In short, already sticky inflation is likely to become more sticky.”
