---
title: "UK Inflation Remains Steady at 38% in August as Fuel Prices Offset Cheaper Air Fares"
publisher: "Stockmark.IT"
author: "Stockmark.IT Website"
published: "2025-09-18T06:29:21+00:00"
modified: "2025-09-18T06:29:21+00:00"
date: 2025-09-18
canonical: "https://stockmark.it/uk-inflation-remains-steady-at-38-in-august-as-fuel-prices-offset-cheaper-air-fares/"
category: "Banking"
categories: ["Banking", "Economy", "Inflation"]
image: "https://i0.wp.com/stockmark.it/wp-content/uploads/2023/08/stencil.viktorija-73.jpg?fit=1200%2C800&quality=89&ssl=1"
format: "news"
language: "en-GB"
---

# UK Inflation Remains Steady at 38% in August as Fuel Prices Offset Cheaper Air Fares

**Published:** September 18, 2025
**Author:** Stockmark.IT Website
**Categories:** Banking, Economy, Inflation
**Featured image:** ![Wide-angle view of a brightly lit supermarket aisle with shelves stocked full of various colourful packaged food products and beverages on both sides. The aisle extends towards the back of the store. @ stockmark.it](https://i0.wp.com/stockmark.it/wp-content/uploads/2023/08/stencil.viktorija-73.jpg?fit=1200%2C800&quality=89&ssl=1)

---

The UK’s annual inflation rate held at 3.8% in August, according to the latest Consumer Prices Index data from the Office for National Statistics. This figure stands unchanged from July and aligns with economists’ forecasts, maintaining financial pressure on households as the Bank of England prepares its next move on interest rates.

The Bank is widely expected to keep rates on hold at 4% this week, given that inflation remains nearly twice the official 2% target. Movements in prices were largely offset in August, with a sharp drop in air fares failing to counteract rising petrol and diesel costs. Hotel accommodation also became less affordable compared to the same period last year.

Food inflation proved persistent, climbing for a fifth consecutive month from 4.9% in July to 5.1% in August. Consumers have seen notable rises in vegetable, cheese and fish prices, with chocolate surging by 15.4% and increases in beef, butter and coffee also evident. Against this backdrop, Chancellor Rachel Reeves faces growing scrutiny ahead of the autumn budget, with speculation rife about possible tax hikes.

Business leaders have expressed concerns that measures such as the £25 billion increase in employer national insurance contributions could prompt job cuts and further price rises. Shadow Chancellor Mel Stride cited soaring borrowing costs, now at a 27-year high, as another burden on workers and businesses. Reeves maintains the government is committed to easing household pressures through targeted support.

Although headline inflation has dropped considerably from the 11.1% peak reached in late 2022—driven by soaring energy and food prices following Russia’s invasion of Ukraine—persistently high utility and tax costs continue to squeeze household finances. The Bank of England remains watchful, especially as elevated food prices disproportionately affect lower income families.

Economists point to volatile weather patterns and climate-induced crop disruption as key components of ongoing food price pressures, while manufacturers and retailers cite regulation and taxation as contributing factors. Trades Union Congress chief Paul Nowak has urged the Bank to reduce interest rates, arguing that elevated borrowing costs are exacerbating the impact on families without easing global price drivers.

Official data shows a cooling jobs market and subdued overall economic growth, intensifying the debate on rate policy. While core inflation—excluding food, energy and tobacco—dipped to 3.6% in August, Britain continues to endure the fastest price growth among the G7, outpacing the US and eurozone rates. As the Bank of England balances competing economic risks, attention turns to upcoming releases on retail sales and public finances.

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**Original URL:** https://stockmark.it/uk-inflation-remains-steady-at-38-in-august-as-fuel-prices-offset-cheaper-air-fares/
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