The rate of inflation has eased slightly to 6.7% confounding the predictions of economists that it would rise.
The Office for National Statistics (ONS) said the consumer prices index (CPI) measure slowed in the 12 months to August, from the 6.8% figure reported the previous month, thanks to food rising at a weaker pace during the month compared to August 2022.
The pace of price growth in the economy, which has eased from a peak of 11.1% just under a year ago, was placed under the greatest pressure by surging global oil costs – being felt across the economy but most visibly at fuel forecourts.
Economists had predicted that inflation would tick upwards to 7.1% and that core inflation, which is closely watched by the Bank of England as it strips out volatile elements such as food and energy costs, would be largely unchanged.
However, the ONS reported a decline in the core inflation measure from 6.9% to 6.2%.
The shift will be seen as reason for optimism by the Bank’s rate-setters that its 14 consecutive interest rate hikes to date to cool inflation are having an effect.
Ahead of the inflation data, the vast majority of economists and financial markets had expected a final hike of 0.25 percentage points to be imposed by the Bank on Thursday.
The rosier picture for inflation now casts greater doubt on whether an increase is guaranteed.
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