Inflation falls to 9.9%

A new report by the Office for National Statistics (ONS) shows that consumer price index (CPI) inflation has gone down to 9.9% in August, compared to 10.1% in July.

Statistics for July saw inflation hit its highest level in 40 years, brought on by the cost of living crisis.

The main cause of the slight dip in inflation was a decrease in fuel prices between July and August. The annual rate for motor fuels eased from 43.7% to 32.1% within this period, mostly attributed to petrol prices falling by 14.3p per litre.

However, prices of food and non-alcoholic beverages rose by 13.1% in the year to August, compared to 12.7% the month before. The ONS noted that this
is the highest annual rate since 2008.

Prices in clothing and footwear also rose by 1.1% on the month. While price increases are fairly common in the clothing industry as the summer season ends, this is the most significant rise since before the Covid-19 pandemic.

Julian Jessop, economics fellow at the Institute of Economic Affairs, said:

"The small fall in UK inflation in August is welcome, but it is far too soon to sound the all clear. The headline rate remains close to 10 per cent and food price inflation is still rising."

Talk to us about your business's finances.