UK inflation remains at 2.2% in August, with services sector inflation rising to 5.6%. Bank of England faces complex decision on interest rates amid persistent price pressures and economic challenges.

The UK Consumer Prices Index (CPI) annual inflation rate was at 2.2% in the 12 months to August 2024, according to the latest data from the Office for National Statistics (ONS). The rate continued stable from July 2024.

UK interest rates kept at 5% as Bank of England says ‘vital’ inflation stays low - Eight of the nine members on the Bank’s Monetary Policy Committee voted to keep the UK base rate unchanged.

The Consumer Price Index (CPI) is the main measure of inflation and this shows how the prices of goods and services have changed over time - here is what it means for you

The latest reading from the Office of National Statistics means inflation remains just above the Bank of England's target of 2%. Last month, the central bank reduced its main interest rate by a quarter-point to 5%, the first cut since the onset of the pandemic.

The decision to hold rates was not unanimous with one member of the Bank's rate-setting Monetary Policy Committee voting for a cut. Governor Andrew Bailey gave hints of further cuts - but forecast inflation will continue to rise.

UK inflation has stayed above the government's target, remaining unchanged at 2.2% in August, as economists reveal a spike in the cost of air fares.

British inflation held steady in August but sped up in the services sector which is closely watched by the Bank of England, data showed on Wednesday, adding to bets that the central bank will keep interest rates on hold on Thursday.

UK inflation rate remained unchanged last month, as air fares rose and petrol prices dropped, but underlying inflation has risen