BUSINESS LIVE: Inflation edges down to 6.7%

The ONS revealed at 7am that inflation had edged down to 6.7 per cent in August from 6.8 per cent in July.

A drop in the key core CPI figure from 6.9 per cent to 6.2 per cent will be seen as good news.

This takes some pressure off the Bank of England ahead of tomorrow’s base rate decision. The Bank is still widely expected to raise base rate by 0.25 percentage points to 5.5 per cent but this could be its last move upwards.

In the data the ONS said:

• The largest downward contributions to the monthly change in CPI annual rates came from food, where prices rose by less in August 2023 than a year ago, and accommodation services, where prices can be volatile and fell in August 2023.
• Rising prices for motor fuel led to the largest upward contribution to the change in the annual rates.
• Core CPI (excluding energy, food, alcohol and tobacco) rose by 6.2% in the 12 months to August 2023, down from 6.9% in July; the CPI goods annual rate rose slightly from 6.1% to 6.3%, while the CPI services annual rate slowed from 7.4% to 6.8%.