UK inflation holds steady at 3.8% as fuel prices offset falling air fares

"Figures from the Office for National Statistics show the annual rate of inflation as measured by the consumer prices index remained at 3.8% last month, the same level as July and matching the forecasts of City economists. After sharp increases in the headline rate in recent months, the ONS said various price movements offset each other in August. The cost of air fares was the main downward driver, while prices rose for petrol and diesel."

"Food price inflation climbed for a fifth consecutive month, with small increases in a range of vegetables, cheese and fish items. The chancellor, Rachel Reeves, is facing intense scrutiny over Labour's economic management amid widespread speculation about tax increases in her autumn budget, which is expected on 26 November. Business groups have warned that the chancellor's first autumn budget measures, including the 25bn increase in employer national insurance contributions, would force them to cut jobs and raise prices."

UK consumer price inflation remained at 3.8% year-on-year in August, unchanged from July. The Office for National Statistics reported that offsetting price movements kept the headline rate level after recent sharp increases. Air fares were the main downward driver while petrol and diesel prices rose and hotel accommodation prices fell by less than a year earlier. Food price inflation rose for a fifth consecutive month with small increases across vegetables, cheese and fish. Business groups warned that planned budget measures, including a 25bn rise in employer national insurance contributions, could force job cuts and higher prices. Financial markets expect the Bank of England to hold rates at 4% amid persistent inflationary pressures.

Read at www.theguardian.com