Inflation rate eases but still near 40-year high
The UK inflation rate dipped to 9.9 per cent in the 12 months to August from 10.1 per cent although prices are still continuing to rise at almost the fastest rate in 40 years.
The slight easing was announced this morning by the Office for National Statistics (ONS) but prices are still rising faster than wages, causing soaring living costs.
Falling petrol prices were the main reason the pace of inflation eased. Petrol prices fell by 14.3p a litre between July and August, while diesel prices also dipped.
Fuel prices have been surging, driven by the war in Ukraine, and moves to reduce Europe's dependence on Russian oil. But wholesale costs fell after fears of a recession in the US hit demand for oil.
The Bank of England has said inflation could peak at more than 13 per cent this year.
Raj Kandola (pictured), head of policy at Greater Birmingham Chambers of Commerce (GBCC), said: “It 's pleasing to see a minor fall in the rate of inflation but the fact that it remains at a 40-year high just underlines the challenges businesses are facing right now.
“While we are hopeful that the introduction of an energy price cap will help to reduce inflationary pressure in the short term, we shouldn 't lose sight of the fact that government support of this magnitude is likely to lead to a spike in inflation in the long term and higher interest rates.
“Early analysis from the GBCC 's latest Quarterly Business Report highlights the vast price pressures businesses are under right now and it 's essential the government uses next week 's expected emergency Budget to introduce a broader package of support to tackle labour market shortages, supply chain disruption and help those firms haemorrhaging cash. ”