UK inflation remains above government target with rate unchanged at 2.2% in August

18 September 2024, 07:16 | Updated: 18 September 2024, 08:03

UK inflation has stayed above the government's target, remaining unchanged at 2.2% in August, as economists reveal a spike in the cost of air fares.

The latest Consumer Price Index (CPI) inflation data, released by the Office for National Statistics (ONS) on Wednesday, aligns with economists predictions.

The key figures are set to assist the Bank of England with its decision on whether to cut interest rates tomorrow.

It means inflation remains above the 2% target set by the government.

However, the figure remains significantly lower than at its peak, with inflation reaching a high of 11.1% in October 2022.

The CPI reflects the average change in the cost of goods in a household shopping basket, using a set list of items revised every year based on purchasing habits.

Speaking on the figures, Grant Fitzner, chief economist at the Office for National Statistics, added "the main movements came from air fares, in particular to European destinations".

The rate rose in July for the first time this year, up from two percent in June.

The ONS said services sector inflation jumped to 5.6% in August from 5.2% in July as air fares rose across European routes. This offset falls in prices at petrol pumps.

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.

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"Also, the prices of shop-bought alcohol fell slightly this month, but rose at the same time last year.

"Following two months of growth, raw material prices fell, driven by lower crude oil prices, while the increase in the cost of goods leaving factories slowed again.

Darren Jones, Chief Secretary to the Treasury, said: "Years of sky-high inflation have taken their toll; and prices are still much higher than four years ago.

"So, while more manageable inflation is welcome, we know that millions of families across Britain are struggling, which is why we are determined to fix the foundations of our economy so we can rebuild Britain and make every part of the country better-off."