MercoPress. South Atlantic News Agency

Bank of England decides on interest rate; UK August consumer inflation, 2,2%

This Thursday the Bank of England meets to decide on interest rates which stand at 5%, and are expected to remain unchanged

Consumer inflation in UK during August remained at an annual 2,2%, helped by lower fuel prices together with hotels and restaurant services, as reported by the Office of National Statistics, ONS Wednesday.

This Thursday the Bank of England meets to decide on interest rates which stand at 5%, and are expected to remain unchanged, despite the fact that a US Federal Reserve optimistic chairman Jerome Powell announced a 50 basis points cut to the main interest rate, down to a target range to 4,75% to 5% .

The latest inflation figure means overall prices are rising at a pace slightly above the Bank of England’s target of 2%. But the rate is significantly lower than at the peak of the cost of living crisis in 2022.

Grant Fitzner, chief economist at the ONS, said inflation “held steady” in August as price falls in some areas compensated for rises in others.

“The main movements came from air fares, in particular to European destinations, which showed a large monthly rise, following a fall this time last year,” he added.

“This was offset by lower prices at the pump as well as falling costs at restaurants and hotels. Also, the prices of shop bought alcohol fell slightly this month, but rose at the same time last year.” Raw material prices also fell last month, driven by lower crude oil prices.