By John Ikani
UK consumer price inflation fell for the first time in almost a year in August as a drop in fuel prices offered some unexpected – and probably brief – respite to households and the Bank of England.
According to the Office for National Statistics (ONS), the rate of Consumer Prices Index (CPI) inflation fell to 9.9 per cent in August, down from 10 per cent in July.
Prices for vehicle fuels and lubricants dropped by 6.8 per cent in August, their largest monthly fall since April 2020.
The ONS said the cost of food and non-alcoholic beverages had risen throughout 2022, and the 1.5% increase between July and August 2022 was the largest between the two months since 1995.
Clothing and footwear prices rose by 1.1% between July and August as summer sales ended, compared with a 0.2% rise last year, pushing up the annual inflation rate from 6.6% to 7.6%.
The slight drop comes a month after Britain‘s rate of inflation rose to a new 40-year high of 10.1%, putting more pressure on families struggling with the cost of living crisis.
Despite the better-than-expected figure, the Bank of England (BOE) is still expected to raise interest rates by 0.5 points when its monetary policy committee meets next week.
Further increases in the annual inflation rate are expected in the coming months as households are hit by rising domestic energy bills but the capping of the average annual bill at £2,500 will mean the peak is now expected to be lower, at about 11%.
