UK August CPI +3.8% vs +3.8% y/y expected | investingLive

The main component leading to the drop in core annual inflation was prices for airfares. That was seen up 2.1% between July and August this year, but was up 22.2% between the same months in 2024. This is largely due to the timing in which the index was captured, with the holiday season falling earlier this year in July. That resulted in a relatively high July index.

Besides that, services inflation also eased slightly from 5.0% to 4.7% in August so that’s another contributing factor. But the headline reading remains high as goods inflation rose marginally from 2.7% to 2.8% in August.

All in all, there isn’t any major changes that should change the BOE outlook for now. Core prices remain elevated with services inflation still sticky, even if it is gradually moderating for now.