The headline rate of inflation in the U.K. stuck at 2.2 percent in August, all but ruling out a second straight interest rate cut from the Bank of England on Thursday.
Data from the Office for National Statistics showed that the underlying trend had — at least in the short term — stopped improving, owing to a sharp rise in airfares and the unbroken strength of the housing market. They ensured that services inflation, which has been worryingly persistent all year, accelerated to 5.9 percent, from 5.7 percent in July.
Housing costs, which account for around one-sixth of the broadest basket of goods and services that the ONS tracks, rose 0.6 percent, leaving the so-called CPIH measure of inflation stuck at 3.1 percent.
However, producer prices, which generally signpost the way consumer prices are heading, continued to ease, helped by a steady decline in energy prices over the month. Input prices fell 0.5 percent on the month, while factory gate prices fell 0.3 percent, leaving them up only 0.2 percent on the year.
The pound rose modestly against both the dollar and the euro on the news, as those holding out for another cut in the Bank Rate on Thursday abandoned their bets. By 8:15 a.m. CET it was at $1.3174 and €1.1846.
