UK
headline
inflation
unexpectedly
cooled
last
month
as
stubborn
core
price
pressure
finally
eased,
figures
from
the
Office
for
National
Statistics
(ONS)
showed
on
Wednesday.
Annually,
consumer
prices
rose
by
6.7%
in
August,
easing
from
a
6.8%
rise
in
July.
August’s
reading
undershot
market
forecasts,
as
cited
by
FXStreet,
which
predicted
inflation
would
heat
up
to
7.1%.
“Large
downward
effects
from
restaurants
and
hotels,
food
and
non-alcoholic
beverages,
recreation
and
culture,
and
furniture
and
household
goods
were
partially
offset
by
upward
contributions
from
transport,
and
housing
and
household
services,”
the
ONS
said.
Rising
prices
for
motor
fuel
were
the
largest
upward
contribution
to
the
annual
rate,
the
ONS
noted.
On
a
monthly
basis,
UK
consumer
prices
rose
0.3%
in
August,
having
fallen
0.4%
in
July
from
June.
Market
expectations
had
been
for
a
0.7%
rise
in
August.
The
annual
core
inflation
rate
–
which
excludes
energy,
food,
alcohol,
and
tobacco
–
cooled
to
6.2%
in
August,
from
July’s
reading
of
6.9%.
August’s
reading
had
been
expected
to
come
in
at
6.8%.
The
cooler-than-expected
data
is
likely
to
take
some
of
the
pressure
off
the
Bank
of
England,
ahead
of
its
interest
rate
decision
on
Thursday.
The
BoE
is
expected
to
hike
rates
by
25
basis
points.
Separately,
the
ONS
reported
UK
producer
prices
continued
to
trend
downwards
annually
in
August,
but
prices
rose
on
a
monthly
basis.
Annually,
producer
input
prices
fell
2.3%
in
August,
after
falling
by
a
revised
3.2%
in
July.
August’s
reading
was
expected
to
be
a
2.7%
decline,
while
July
was
first
reported
as
a
3.3%
fall.
Crude
oil
and
petroleum
products
provided
the
largest
downward
contribution
to
annual
rates
of
input
and
output
inflation,
respectively,
the
ONS
said.
“While
annual
producer
price
inflation
rates
have
recently
turned
negative,
with
prices
in
some
sectors
falling,
the
index
levels
for
both
input
and
output
prices
remain
substantially
higher
than
their
2021
levels,”
it
noted.
Producer
input
prices
rose
0.4%
on
a
monthly
basis
in
August,
reversing
the
0.4%
monthly
fall
in
July.
They
had
been
expected
to
rise
by
0.2%.
By
Elizabeth
Winter,
Alliance
News
senior
markets
reporter
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