The UK's rate of inflation remained unchanged last month but almost double the Government and Bank of England's target. Figures from the Office for National Statistics (ONS) released on Wednesday showed the Consumer Prices Index rate of inflation stayed steady at 3.8% in the 12 months to August.
This was the level that most economists had been expecting, although the cost of the weekly food shop continues to rise. The rate of food and drink inflation rose to 5.1% in August, from 4.9% in July. This represents the fifth month in a row that the rate has increased.
ONS chief economist Grant Fitzner said: “The cost of airfares was the main downward driver this month with prices rising less than a year ago following the large increase in July linked to the timing of the summer holidays.
“This was offset by a rise in prices at the pump and the cost of hotel accommodation falling less than this time last year.
“Food price inflation climbed for the fifth consecutive month, with small increases seen across a range of vegetables, cheese and fish items.”
The rate is likely to add pressure on UK households, as the Bank of England (BoE) considers keeping interest rates at higher levels to stave off skyrocketing consumer prices.
The unchanged figure is unlikely to be welcomed by Chancellor Rachel Reeves, being nearly double the 2% target set by the Government and BoE.
Ms Reeves said: “I know families are finding it tough and that for many the economy feels stuck. That’s why I’m determined to bring costs down and support people who are facing higher bills.”
She added the Government was taking action “to put more money in people’s pockets while we work to build a stronger, more stable economy that rewards hard work”.
Shadow chancellor Sir Mel Stride said the Government was failing to control inflation.
He said: “This morning’s news that inflation remains well above target is deeply worrying for families. This is the 11th consecutive month inflation has exceeded the 2% target.
“Labour’s decision to tax jobs and ramp up borrowing is pushing up costs and stoking inflation – making everyday essentials more expensive.”
