Inflation in Britain surprisingly falls to 18-month low

Inflation in Britain surprisingly falls to 18-month low

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The ONS said food prices rose less in August than a year earlier. This effect was only partially offset by higher energy costs.

“A decline in the often irregular costs of overnight accommodation and airfares, as well as a smaller increase in food prices than last year, led to a slight decline in the inflation rate this month,” said ONS chief economist Grant Fitzner. “

This was partially offset by a rise in petrol and diesel prices, following record prices seen in July 2022, compared to a steep decline at this time last year.

However, economists warned that oil prices rising to $100 a barrel this week would add to new inflation pressures.

“The gains in crude oil prices in recent weeks will be tempered, but there will be relief that oil prices have also moved away from weekly highs,” said Susannah Streeter, head of currencies and markets at Hargreaves Lansdowne.

Oil prices have been largely buoyed by production cuts by major producer Russia and OPEC kingpin Saudi Arabia, which are set to last at least through the end of the year.

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