United Kingdom: Inflation resumes downward trend in August
September 18, 2012
In August, consumer prices increased 0.5% over the preceding month, which came in above the 0.1% rise seen in July but in line with market expectations. Higher prices for clothing and footwear as well as for transport, amid higher fuel costs and air transport fares, were the main drivers behind the monthly increase. Despite the monthly rise, annual headline inflation inched down from 2.6% in July to 2.5% in August, which was also in line with market expectations. Furthermore, the trend continues to point downwards, with annual average inflation moderating from 3.7% in July to 3.6% in August. Based on figures from its latest inflation report from August, the Bank of England expects inflation to average 2.7% this year, before moderating to 2.1% next year.