Inflation falls in August but remains near 40-year high
Overall prices for food and non-alcoholic beverages have risen throughout 2022, and the 1.5% increase between July and August 2022 was the largest July to August rise since 1995
UK inflation eased slightly in August to 9.9%, down from 10.1% in July, but remains near a 40-year high as prices continue to rise, according to the latest figures from the Office for National Statistics (ONS).
On a monthly basis, CPI rose by 0.5% in August 2022, compared with a rise of 0.7% in August 2021.
A fall in the price of motor fuels made the largest downward contribution to the change in both the CPIH and CPI annual inflation rates between July and August 2022. Rising food prices made the largest, partially offsetting, upward contribution to the change in the rates.
Overall prices for food and non-alcoholic beverages have risen throughout 2022, and the 1.5% increase between July and August 2022 was the largest July to August rise since 1995, when a constructed series for food and non-alcoholic beverages showed a 1.6% increase.
Meanwhile, the ONS added the annual rate for clothing and footwear was 7.6% in the year to August 2022, up from 6.6% in July. Prices rose by 1.1% on the month in 2022, compared with a smaller rise of 0.2% in August 2021. However, it noted prices normally rise at this time of year as the autumn ranges enter the shops following the summer sales season.
Commenting on the figures, James Brown, managing partner at global consultancy Simon-Kucher and Partners, said: “The UK’s reported inflation dipped slightly to 9.9% this morning vs. 10.1% last month, dropping below the symbolic 10% number. While its slowing trajectory may come as a relief to some, British businesses continue to battle the 40-year highs as they seek the optimal pricing strategy heading into a likely recession and a potential power shortage.
“Motor fuel costs fell which helped the headline numbers, but the continued rise in food costs has been a big part of keeping inflation high and will continue to be felt by families on every supermarket trip.”
He added: “We’ve not seen all businesses pass on the rising costs yet, and further price increases are inevitable. From a business perspective what remains to be seen now is how commercial teams are going to approach their roll out as almost all leadership teams lack the experience of operating in such an uncertain economic environment.”
