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<\/p>\nInflation fall for the third month in a row in August, down to 6.7 per cent from 6.8 per cent in\u00a0July, the Office for National Statistics said.<\/p>\n
The drop surprised analysts who had expected a surge in fuel prices to cause a spike in price rises overall.<\/p>\n
It marks the lowest rate since February last year. Analysts had predicted inflation to accelerate last month to a reading of 7.1 per cent due to a sharp rise in motor fuel amid a rebound in oil prices.\u00a0<\/p>\n
But that rise was offset by a decline in air fares and hotel charges, as well as a slowdown in food price inflation.\u00a0<\/p>\n
It could ease pressure on Bank of England interest rate-setters, who meet tomorrow to decide whether to add to mortgage woes for homeowners. The last few months have seen rates rise sharply as they have sought to tackle inflation.\u00a0<\/p>\n
Jeremy Hunt\u00a0said: ‘Today’s news shows the plan to deal with inflation is working – plain and simple.’<\/p>\n
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The drop surprised analysts who had expected a surge in fuel prices to cause a spike in price rises overall.<\/p>\n
Grant Fitzner, chief economist at the Office for National Statistics, said: ‘The rate of inflation eased slightly this month driven by falls in the often-erratic cost of overnight accommodation and air fares, as well as food prices rising by less than the same time last year.<\/p>\n
‘This was partially offset by an increase in the price of petrol and diesel compared with a steep decline at this time last year, following record prices seen in July 2022.<\/p>\n
‘Core inflation has slowed this month by more than the headline rate, driven by lower services prices.’<\/p>\n
Britain is forecast to have the highest inflation rate of the world’s G7 economies this year.<\/p>\n
The Organisation for Economic Co-operation and Development yesterday increased its predicted average UK inflation rate for 2023 compared with its previous estimate.<\/p>\n
The group’s economists also slightly reduced their growth forecast for Britain for next year amid pressure from higher interest rates.<\/p>\n
The OECD said it expects UK inflation of 7.2 per cent for 2023, increasing its previous forecast of 6.9 per cent from June.<\/p>\n
This would be the fastest rate across the world’s G7 advanced economies and third fastest across the G20.<\/p>\n
But\u00a0Downing Street said the new OECD forecasts did not take into account recent revisions elsewhere suggesting Britain’s economy recovered quicker than others from the pandemic.\u00a0<\/p>\n