UK's CPI increases 6.7% in August 2023

In a further breakdown, the August 2023 rate is the lowest observed since February 2022, reflecting a steady slowdown in the inflation rate. This decline in the annual rate between July and August was partly due to prices increasing by a modest 0.3 per cent month-on-month, as opposed to the 0.5 per cent rise witnessed a year earlier.

Delving into specific categories, core CPI, which excludes energy, food, alcohol, and tobacco, experienced a decrease, moving from 6.9 per cent in July to 6.2 per cent in the 12 months to August 2023. However, the annual rate for goods slightly went up from 6.1 per cent to 6.3 per cent, as per ONS.

Clothing and footwear witnessed a noticeable annual CPI increase of 7 per cent in August, up from 6.6 per cent in July. When analysed on a monthly basis, this sector saw a rise of 1.5 per cent in August 2023, a figure that exceeds the 1.1 per cent growth in August 2022.

Moreover, the data demonstrated that downward contributions from six of the twelve divisions were the driving factors behind the decrease in the annual CPI rate into August 2023.

Alongside this, the CPI including owner occupiers' housing costs (CPIH) stood at 6.3 per cent in the 12 months to August 2023, a slight reduction from the 6.4 per cent recorded in July. In terms of monthly metrics, the CPIH advanced by 0.4 per cent in August 2023, compared to the 0.5 per cent rise noted in August the previous year.

Alpesh Paleja, CBI Lead Economist, said: “Inflation fell again in August, defying expectations of a slight uptick. We expect inflation to continue falling over the rest of this year, but the recent uptick in global oil and domestic fuel prices means that the path back down may now be bumpier.

“Despite the latest fall, the Bank of England will still be concerned by signs of stubbornly high domestic price pressures. As a result, another rise in interest rates tomorrow still looks more likely than not, though changes to monetary policy beyond this will be very data dependent. But with the MPC suggesting that rates will remain higher for longer, businesses and households should plan for tighter financial conditions being here to stay.”

Fibre2Fashion News Desk (DP)