Monday, December 23, 2024

UK Inflation rate holds steady in August at 2.2%

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Inflation has held steady at 2.2% in the year to August, according to official figures.

Prices for air fares rose but the increase was offset by lower fuel prices and prices rising at a slower rate in restaurants, the Office for National Statistics (ONS) said.

The latest figure means inflation remains slightly above the Bank of England’s target of 2%.

But it is significantly lower than at the peak of the cost of living crisis in 2022.

The latest inflation data comes as the Bank of England is expected to keep interest rates unchanged at 5% when it meets on Thursday.

Grant Fitzner, chief economist at the ONS, said inflation “held steady” in August as “various price fluctuations offset each other”.

“The main movements came from air fares, in particular to European destinations, which showed a large monthly rise, following a fall this time last year,” he added.

“This was offset by lower prices at the pump as well as falling costs at restaurants and hotels. Also, the prices of shop bought alcohol fell slightly this month, but rose at the same time last year.”

Raw material prices also fell last month, driven by lower crude oil prices.

The 22% rise in air fares was in contrast to a 2.1% fall between July and August last year. Air fares usually rise in the summer, but this was the second largest rise in airfares since 2001, the ONS said.

Services, which includes things like eating out and haircuts as well as transport, saw prices rise at 5.6%, up from 5.2% in the year to July.

Falling costs at restaurants and hotels meant prices in those sectors rose at 4.4% in the year to August, a slowdown from previous months.

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