UK inflation stays regular at 3.8% in August, ONS pronounces

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Your assist makes all of the distinction. Learn extra UK inflation remained unchanged final month, in keeping with official figures, however food and drinks worth rises have accelerated for the fifth month in a row in a success the poorest households.

The Workplace for Nationwide Statistics (ONS) introduced on Wednesday the speed of Client Costs Index (CPI) was 3.8 per cent in August, the identical as July. This was the extent that the majority economists had been anticipating.

Nonetheless, the speed of food and drinks inflation rose to five.1 per cent in August, from 4.9 per cent in July, as buyers continued to face greater costs for gadgets on the until. It marks the fifth month in a row that the speed has elevated.

ONS chief economist Grant Fitzner mentioned: "The price of airfares was the principle downward driver this month with costs rising lower than a yr in the past following the big improve in July linked to the timing of the summer time holidays.

"This was offset by an increase in costs on the pump and the price of resort lodging falling lower than this time final yr.

"Meals worth inflation climbed for the fifth consecutive month, with small will increase seen throughout a spread of greens, cheese and fish gadgets."

Chancellor Rachel Reeves mentioned: “I do know households are discovering it powerful and that for a lot of the economic system feels caught. That’s why I’m decided to carry prices down and assist people who find themselves going through greater payments.

“By way of our Plan for Change, we're taking motion — elevating the Nationwide Residing Wage, extending the £3 bus fare cap, and increasing free faculty meals, to place extra money in folks’s pockets whereas we work to construct a stronger, extra steady economic system that rewards laborious work.”

The Meals and Drink Federation (FDF) just lately mentioned present costs had been “steeper than something in current many years” and have projected that prices might proceed to rise, with meals inflation estimated to hit 5.7 per cent earlier than the top of this yr.

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<img src="https://static.independent.co.uk/2025/09/16/08/872f2bf41f2b82a1130f13b07758a08fY29udGVudHNlYXJjaGFwaSwxNzU4MDkzOTgx-2.81063263.jpg" srcset="https://static.independent.co.uk/2025/09/16/08/872f2bf41f2b82a1130f13b07758a08fY29udGVudHNlYXJjaGFwaSwxNzU4MDkzOTgx-2.81063263.jpg?quality=75&width=320&auto=webp 320w, https://static.independent.co.uk/2025/09/16/08/872f2bf41f2b82a1130f13b07758a08fY29udGVudHNlYXJjaGFwaSwxNzU4MDkzOTgx-2.81063263.jpg?quality=75&width=640&auto=webp 640w" loading="lazy" alt="Supermarket own lines make up 51.2% of all sales, up from 50.9% a year ago, as shoppers seek out cheaper alternatives (PA)" class="sc-1mc30lb-0 ggpMaE inline-gallery-btn"/> open picture in gallery

Grocery store personal strains make up 51.2% of all gross sales, up from 50.9% a yr in the past, as buyers search out cheaper alternate options (PA) (PA Wire) The ONS additionally releases inflation knowledge for CPI together with proprietor occupiers' housing prices (CPIH) - that measure of inflation sits at 4.1 per cent for the 12 months to August, down from 4.2 per cent a month earlier. CPIH is a extra complete measure of inflation which permits worldwide comparisons to be drawn, although the UK tends to make use of CPI extra regularly.

Scott Gardner, funding strategist at Nutmeg, identified the indicators throughout the knowledge which steered some positives for the longer term - however famous households would nonetheless be footing the invoice for now.

“With forecasts suggesting inflation might rise even additional within the short-term and hit 4% going into the autumn, the cost-of-living pressure on family funds will persist within the months forward. In brief, already sticky inflation is more likely to get stickier,” he mentioned.

“Whereas the headline fee stays elevated, there are some positives from this newest inflation studying. Carefully watched core inflation fell in the course of the 12-month interval to August. Providers inflation additionally confirmed good progress however there are indicators that companies proceed to move on their very own value will increase. On the similar time, for shoppers, the vitality worth fall was offset by a rise in meals costs, which proceed to speed up and punish many on the checkout.”

In the meantime, the British Chambers of Commerce (BCC) have underlined that companies are additionally nonetheless within the firing line and reiterated their name for the federal government to not add additional tax burdens on companies within the Price range.

“Companies might be nervous by inflation holding at 3.8 per cent at a time when value pressures proceed to chunk, particularly on wages. The BCC’s newest financial forecast expects inflation to stay at round this stage till the top of the yr,” mentioned Stuart Morrison, BCC analysis supervisor.

“Companies are clear that April’s rise in nationwide insurance coverage, continued sturdy wage progress and better tariffs are all eroding their working margins. There's additionally rising concern that sticky inflation will restrict the scope for additional rate of interest cuts.

“Forward of the Autumn Price range, our message to the Chancellor is obvious – there have to be no new tax rises on enterprise. Companies can not present the financial progress all of us want in the event that they proceed to be hampered by rising prices.”

One finance professional urged savers to guard their cash by guaranteeing their financial institution’s rate of interest was greater than the speed of inflation.

“Whereas the inflation fee holding at 3.8% might seem steady, it nonetheless poses a problem for savers. At this stage, the true worth of their cash continues to be chipped away,” defined Derek Sprawling, head of cash at Spring Financial savings.

“Now is just not the time for complacency and savers must be proactive in reviewing their accounts. With many nonetheless incomes minimal curiosity, switching to a financial savings product that gives a return above inflation is essential to preserving monetary wellbeing.”

With inflation remaining excessive and jobs knowledge from this week additionally nonetheless unsure, there may be anticipated to be no likelihood the Financial institution of England will lower rates of interest additional when the Financial Coverage Committee meets on Thursday. Many analysts are actually anticipating no additional cuts throughout the rest of 2025, leaving the Financial institution Fee at 4 per cent.