Rate of inflation slows ahead of Bank of England decision

The rate of inflation slowed in the 12 months to August, easing fears that it would rise again in latest figures announced by the Office of National Statistics (ONS) this morning (September 20).

Inflation is now running at 6.7% – down slightly on the 6.8% reported for the year to July.

The slowing of the rate has been put down to food rising at a weaker pace.

Analysts had feared that inflation could rise to as much as 7.1% in the new figures, but the relative stability may see persuade the Bank of England to leave interest rates untouched when it makes its decision tomorrow at midday.

ONS chief economist Grant Fitzner said: “The rate of inflation eased slightly this month driven by falls in the often-erratic cost of overnight accommodation and air fares, as well as food prices rising by less than the same time last year.

“This was partially offset by an increase in the price of petrol and diesel compared with a steep decline at this time last year, following record prices seen in July 2022.

“Core inflation has slowed this month by more than the headline rate, driven by lower service prices.”