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UK inflation remains at 0.6 percent in August, says ONS

Staff Writer |
UK inflation did not rise as much as hoped in August, according to official figures, indicating that the recent fall in the pound has not begun to boost inflation yet.

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The consumer price index (CPI) remained flat with a 0.3% month-on-month increase from the negative 0.1% figure in the previous month but short of the 0.4% expected by economists.

Following two rises in previous months, data from the Office for National Statistics revealed that annual CPI kept rising at 0.6% for the second month in August, while the market had been expecting an acceleration to 0.7% and the Bank of England had forecast a rise of 0.8%.

Rising food prices and air fares were the main drivers of inflation, the ONS said, plus a smaller fall in the petrol prices than a year ago, with these upward pressures offset by hotels, wine and clothing.

ONS' head of inflation Mike Prestwood noted that raw material costs have risen for the second month running, "partly due to the falling value of the pound, though there is little sign of this feeding through to consumer prices yet".

Core CPI, which excludes more volatile prices like fuel and food, also remained steady at its year-on-year rise of 1.3%, again short of an forecast increase to 1.4%.

Producer input price inflation rose to 7.6% in August from 4.3% in July, while producer output price inflation rose to 0.8% from 0.3% a month ago, in signs that increased prices will be moved onto consumers soon.

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