UK inflation fell in August

The UK inflation rate fell below 10% in August as falling fuel prices eased the ongoing cost of living crisis.

Consumer prices rose 0.5% from July, slightly below expectations of 0.6%, while the annual CPI rate fell to 9.9% from 10.1%. Analysts had expected this rate to rise to 10.2%. Pressures on producer prices also eased somewhat, with input prices falling by 1.2% mom, the first decline in two years. This reduced the annual factory gate inflation rate from 17.1% to 16.1%. Following the data, sterling remained flat at $1.1500. However, as in the US CPI data released on Tuesday, core inflation was stronger than expected, indicating that the core figures were affected by the fall in fuel prices. After rising by 0.3% in July, core CPI rose by 0.8% mom in August, pushing the annual rate to a new high of 6.3%. Household service prices also rose strongly, as did food prices. "Price pressures are likely to remain elevated this month despite a reduction in fuel prices as food and service costs continue to rise," Saxo Bank analysts said in a morning note. "A further rise in inflation can be expected in October, but capping household energy bills may help to contain inflationary pressures going forward." Simon French, chief economist at Panmure Gordon, said the figures did not change his view that the Bank of England will raise its key interest rate by 75 basis points at its Monetary Policy Committee meeting next week. The meeting was postponed by a week due to the national mourning period for Queen Elizabeth II. Follow Global Economic Developments on Social Media! Click here to follow Ieconomy official Facebook account! Click here to follow Ieconomy official Instagram account! Click here to follow Ieconomy official Twitter account!