Sticky UK inflation unlikely to move the needle for Bank of England

The U.K.'s annual inflation rate was steady at 3.8% in August, according to data released by the Office for National Statistics (ONS) on Wednesday.

Economists polled by Reuters had expected inflation to reach 3.8% in the twelve months to August.

August core inflation, which excludes more volatile energy, food, alcohol and tobacco prices, rose by an annual 3.6%, down from 3.8% in the twelve months to July.

“The cost of airfares was the main downward driver this month with prices rising less than a year ago following the large increase in July linked to the timing of the summer holidays,” the ONS' Chief Economist Grant Fitzner said on the X social media platform.

“This was offset by a rise in prices at the pump and the cost of hotel accommodation falling less than this time last year.”

Food price inflation climbed for the fifth consecutive month, the ONS noted, with small increases seen across a range of vegetables, cheese and fish items.

The data comes after the consumer price index hit a hotter-than-expected 3.8% in July, exceeding forecasts.

Finance Minister Rachel Reeves commented that she recognized that “families are finding it tough and that for many the economy feels stuck. That's why I'm determined to bring costs down and support people who are facing higher bills.”

Pound sterling was slightly lower against the dollar after the data release, at $1.3637.