Inflation unchanged at 2.2% ahead of BoE rate announcement

18th Sep 2024 07:16

(Sharecast News) - UK inflation was unchanged in August, according to figures released on Wednesday by the Office for National Statistics, remaining above the Bank of England's target.

Consumer price inflation was 2.2% in the year to August, in line with expectations and above the BoE's 2% target.

Services inflation rose to 5.6% in August from 5.2% in July, also as expected.

Core CPI - which excludes energy, food, alcohol and tobacco - rose to 3.6% from 3.3% in July. This was a touch above expectations of 3.5%.

ONS chief economist Grant Fitzner said: "Inflation held steady in August as various price fluctuations offset each other.

"The main movements came from air fares, in particular to European destinations, which showed a large monthly rise, following a fall this time last year.

"This was offset by lower prices at the pump as well as falling costs at restaurants and hotels. Also, the prices of shop bought alcohol fell slightly this month, but rose at the same time last year."

Ruth Gregory, deputy chief UK economist at Capital Economics, said: "Overall, a pause on interest rate cuts was already expected tomorrow and today's release cements that view.

"We continue to assume the next 25 basis point rate interest rate cut will take place in November and that rates will be cut at alternative BoE meetings until June."