British inflation holds steady at 0.6pc
BRITAIN’S annual inflation rate held steady last month, official data showed, giving little indication that the post-Brexit collapse in the pound had lifted prices.
The 12-month Consumer Price Index rose by 0.6 percent in August, as rising food and transport prices were offset by the falling cost of clothing, wine and hotels, the Office for National Statistics (ONS) said.
CPI had also risen by 0.6pc in the year to July, the ONS added. Market expectations had been for an August increase of 0.7pc.
There was “little sign” of the plunge of the pound to 31-year lows, after the shock Brexit vote being passed through to consumer prices.
The fall in the value of the pound makes British goods cheaper to export, but makes imported goods and products more expensive.
“Fuel costs falling more slowly than a year ago as well as rising food prices and air fares all pushed up CPI in August, but these were offset by hotels, wine and clothing leaving the headline rate of inflation unchanged,” said Mike Prestwood, head of inflation at the ONS.
“Raw materials costs have risen for the second month running, partly due to the falling value of the pound, though there is little sign of this feeding through to consumer prices yet.”
The British pound has plunged in value against most currencies since the June 23 decision to leave the European Union.