Consumer price inflation records surprise drop in August

Similarly, the Consumer Prices Index including owner occupiers’ housing costs (CPIH) inflation dipped by 0.1% between the two months, going from 6.4% to 6.3%. This easing of pressure comes as a result of prices being at a more moderate 0.3% when compared to the 0.5% figure seen during the same period last year.

This, albeit small, decline goes against the expectations of most commentators – who expected a small rise of around 0.2% to 0.3%, with even chancellor Jeremy Hunt saying at the start of September that he expected a “blip” increase in inflation this month as data suggested average fuel prices jumped back above £1.50 a litre.  

Commenting on the latest drop on X, formerly known as Twitter, Hunt said: “Inflation never falls in a straight line but it’s now down 40% from its peak. The plan is working.  

“But we need to stick to it: even at 6.7% there’s still immense pressure on family budgets. That means no borrowing binge, which would simply keep interest rates higher for longer.” 

This was echoed by the Money Advice Trust’s acting chief executive David Cheadle, who said: “These latest inflation figures show that the pain is far from over for households bearing the brunt of this extended period of high costs.

“Our advisers at National Debtline are hearing first-hand from people whose incomes have been unable to keep up with the cost of essentials, such as energy, rent and food. Urgent government action is needed to support people who fall behind and ensure they have access to safe and affordable routes out of debt.”