UK inflation data for August 2025

The annual inflation rate in the UK was fixed at 3.8 % in August, according to Data It was issued by the National Statistical Office (ONS) on Wednesday.

The economists of Reuters expected the inflation to reach 3.8 % in the twelve months to August.

The basic inflation increased in August, which excludes more volatile prices for energy, food, alcohol and tobacco, by 3.6 % annually, a decrease from 3.8 % in the twelve months to July.

“The cost of flights was the main lower driver this month, as prices rose less than a year after the large increase in July related to summer vacation time,” said the chief economist at ONS on the x social platform.

“This has been compensated due to the high prices in the pump and the cost of accommodation at the hotel is less than this time last year.”

ONS pointed out that inflation in food prices rose for the fifth month in a row, with small increases in a group of vegetables, cheese and fish.

The data comes after the consumer price index arrives Most hot than expected 3.8 % In July, the predictions exceeded.

Finance Minister Rachel Reeves commented that she realized that “families find them difficult and that for many people feel stumbled. That is why I am determined to reduce costs and support people who face higher bills.”

The British pound was slightly lower against the dollar after issuing data, at $ 1.3637.

The Bank of England is closely monitoring inflation data After prediction, the consumer price index can reach its peak by 4 % in SeptemberBefore retreating in early 2026.

Central Bank Reduce interest rates In August, taking the main rate from 4.25 % to 4 %, saying that it will require a “gradual and accurate” approach to cash dilution, recognition of inflationary pressures, but it is aware of the need to enhance growth and investment.

After that, it meets on Thursday, but it is not expected to modify the prices this month, and there is uncertainty about whether it can be reduced in November.

Drug inflation restricts the opportunity for the fourth rate by the Bank of England this year, Scott Gardner, the investment strategy in the JP Morgan, Nutmeg digital wealth manager, on Wednesday.

He said in the fourth environment in 2025: “While wage growth has decreased in recent months, more progress on the inflation front is needed to persuade the bank’s policy makers that the additional reduction in the current economic environment. The fourth reduction in 2025 will require more weak labor market, which is a somewhat Puranian victory.”

“With expectations indicating that inflation may rise further in the short term and hit 4 % to autumn, pressing the cost of living on home finance will continue in the coming months,” Gardner said, adding that “in short, it is already possible that sticky inflation will become more evident.”