Inflation remained at 3.8% in the 12 months to August, in line with July, according to new figures from the Office for National Statistics (ONS), measured by the Consumer Prices Index (CPI).
On a monthly basis, CPI rose by 0.3% in August 2025, the same rate as in August 2024.
Air fares made the largest downward contribution to the monthly change; restaurants and hotels, and motor fuels made large, partially offsetting, upward contributions.
Core inflation, meanwhile, which takes out volatile factors like energy, food, alcohol and tobacco to give a clear picture of underlying trends, came in at 3.6% in the 12 months to August, down from the 3.8% in July and in line with forecasts.
Martin Sartorius, principal economist, CBI, said: “Inflation remained elevated in August, consistent with the Bank of England’s projections. Higher food and energy prices, alongside the passthrough from increased labour costs, are expected to keep price growth firm in the near term.
“The Monetary Policy Committee looks set to keep interest rates unchanged tomorrow and, going forward, the MPC faces a delicate balance between signs of a cooling labour market and the risk of price pressures remaining stubbornly high. Its rate decision in November will likely hinge on whether future data give the MPC confidence that a further cut will not contribute to inflation staying elevated for longer.”
