LONDON: British inflation remained unchanged in August, according to official data released on Wednesday.
The Consumer Prices Index held steady at 3.8% last month, matching the July figure as reported by the Office for National Statistics.
This reading aligned precisely with analysts’ forecasts ahead of the announcement.
The Bank of England reduced borrowing costs to 4% in August, marking its lowest level in two and a half years.
Financial markets widely expect the central bank to maintain its key interest rate during Thursday’s meeting and throughout the remainder of 2025.
The Labour government encountered further economic challenges last week with data confirming stagnation in July.
This economic data emerged after a politically turbulent period for Prime Minister Keir Starmer.
Additional official data on Tuesday revealed UK unemployment persisting at a four-year high of 4.7%.
Although the July GDP figure met market expectations, the government acknowledged difficulties in stimulating economic growth.
The government’s annual budget announcement is scheduled for late November.
The Bank of England anticipates inflation reaching a peak of 4% in September, doubling its official 2% target.
Finance minister Rachel Reeves recognised the ongoing pressure on household finances across the nation.
Reeves promised to maintain a “tight grip” on public spending while supporting economic recovery.
Britain’s economy has faced growth challenges following tax increases and public spending cuts implemented after Labour’s general election victory last July.
Several major US technology firms announced significant investment plans in the UK this week.
Microsoft and Google unveiled new commitments during President Donald Trump’s state visit to the country.
Investment strategist Lindsay James highlighted the implications of persistent inflation for consumers and businesses.
James noted that higher interest rates would maintain pressure on households facing elevated living costs.
She added that businesses would continue facing squeezed demand under current economic conditions. – AFP
