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Inflation unchanged at 3.1%

IFAonline
Written By:
Posted:
September 14, 2010
Updated:
September 14, 2010

Inflation was unchanged at 3.1% in August, according to the Office for National Statistics (ONS).

With strong rises in air fares, a three-month downward trend has been brought to an end and the figure remains well above the 2% Bank of England target.

Other factors contributing to the continuing high figure include food and clothing prices, although falling second-hand car prices and decreases in petrol and diesel prices have applied some downward pressure.

However, a fall has been registered with RPI inflation, down from 4.8% in July to 4.7% last month, mainly becasue air travel does not have as much weight as it does with the CPI.

The ONS says air fares went up by 16.1% in August, driven by long haul and European routes.

Because CPI inflation remains above the 2% target, Bank of England Governor Mervyn King will once again have to write a letter to the Chancellor explaining the continually high figures.

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In his previous letter, last month, he put high inflation down to the VAT increase in January 2010 and past rises in oil prices.