18 Sep 2024Inflation has held steady at 2.2% in the year to August, according to the Office for National Statistics (ONS). Prices for air fares rose but the increase was offset by lower fuel prices and falling costs at restaurants, the ONS said. Raw material prices also fell last month, driven by lower crude oil prices. The latest figure means inflation remains slightly above the Bank of England's target of 2%. But it is significantly lower than at the peak of the cost-of-living crisis in 2022. Martin Sartorius, Principal Economist at the Confederation of British Industry (CBI), said: 'Inflation has fallen short of the Bank of England's latest forecast expectations for the second month in a row. This will be welcomed by households and businesses, although they will still be feeling the pinch from three years of elevated costs growth. 'While the Bank's Monetary Policy Committee will be reassured by today's data, they're likely to remain wary of loosening policy too quickly. Inflation is expected to pick up later this year and domestic price pressures, such as wage growth, still pose an upside risk to the outlook. That should result in a gradual path for interest rate cuts going forward, with rates likely to stay unchanged this month.'