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Inflation unchanged at 3.1%

by: IFAonline
  • 14/09/2010
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Inflation unchanged at 3.1%
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.

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

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