The UK’s inflation rate fell slightly in August as diesel and petrol prices dropped over the month.
The Office for National Statistics (ONS) said Consumer Prices Index inflation reached 9.9% in the year to August, down from 10.1% the previous month, but still close to its 40-year record.
Experts had expected the figure to be unchanged between the two months, and there are some hopes that the soaring cost-of-living might have peaked. The ONS said the biggest downward pressure on the inflation rate was the price of motor fuels, which has been falling in recent months, with other prices such as food and clothing still rising.
Read more : warning on rising grocery bills
The 6.8% drop in fuel prices was the highest since between March and April 2020, the early days of the pandemic when oil prices briefly went negative on some markets.
“The easing in the annual inflation rate in August 2022 reflected principally a fall in the price of motor fuels in the transport part of the index,” the ONS said. “Smaller, partially offsetting, upward effects came from price rises for food and non-alcoholic beverages, miscellaneous goods and services, and clothing and footwear.”
But business groups have warned that pressures remain on companies around the country.
Alex Veitch, director of policy and public affairs at the British Chambers of Commerce, said: “This rise in Consumer Prices Index inflation by 9.9% confirms the sustained pressure businesses and consumers have been facing over the past year. This is also reflected in the squeeze on businesses’ operating costs as Producer Price Inflation figures remain at record highs of 20.5% in the year to August 2022.
“While the rate of growth has eased slightly, this has been driven by a fall in motor fuel costs – other goods continue to rise. There is a limit to how long any firm can sustain these rising costs before something has to give. We know from our research that two thirds of businesses plan to increase their own prices.
“The size of last week’s Government intervention on energy prices should have a dampening effect on inflation when it is enacted. But the lack of detail on exactly how much help any individual business will get, and for how long, means very few will be planning to invest any time soon.”
READ NEXT:
* Sainsbury's offering staff pay rise and free food
