UK Inflation Inches Lower During August

Cheaper clothes prices helped push the UK rate of inflation lower during August, according to official figures released today by the Office of National Statistics.

The data shows that the Consumer Prices Index dipped to 1.3% last month, down from 1.4% in July, bringing it further below the Bank of England’s current target of 2%.

The underlying rate of RPI inflation remained unchanged at 2.2% last month, but the headline rate of RPI inflation, which includes mortgage interest repayments, rose by 3.2%, up from 3% in July.

The main downward influences on the CPI came from clothing and footwear prices, which increased as usual following the summers sales, but by less than last year. The reduction of toys, computer games and consoles also helped to push the figure down.

The Government’s new CPI index, which was introduced at end of last year, differs from the old Retail Prices Index (RPI) measure because it excludes housing and council tax costs. The rise in the headline RPI was mainly due to mortgage interest payments rising this year following a series of rate rises by the Bank of England.

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