UK inflation slows down

In August, annual inflation in the UK was 9.9%, slightly below the record inflation in July, but still very close to the highest levels in 40 years. At the National Statistical Service notethat the greatest contribution to the decline in inflation in August was made by the fall in motor fuel prices. Gasoline prices fell by £0.14 per liter in August amid falling global oil prices. As a result, annual inflation for the motor fuel category, which stood at 43.7% in July, dropped to 32.1% in August.

At the same time, food prices have continued to rise for more than a year. In August, annual inflation in this category reached a 14-year high of 13.1%, thus making the largest contribution to maintaining a high level of headline inflation. The 1.5% increase in prices for food and non-alcoholic beverages in August compared to July was the most significant increase in prices in this category and period since 1995. In August, prices for milk, cheese and eggs increased the most in the food category.

According to experts, we should not expect a significant slowdown in inflation in the near future. By words Mazars Chief Economist George Lagrias, “high energy prices over the previous months have been firmly embedded in most supply chains, and it will take many months of low oil prices for end-user prices to drop tangibly.” Inflation, according to the expert, “will remain the central theme, at least until the end of this year.”

Alena Miklashevskaya