Inflation Eases As Oil Edges Higher
The annual pace of inflation slowed last month despite a rise in oil and fuel costs, according to figures released by the Office for National Statistics.
The ONS said the year-on-year consumer prices index (CPI) stood at 2.5% in August, down 0.1% from a month earlier.
The CPI figure matched the forecast by the ONS.
It added that the retail prices index (RPI) eased to 2.9% last month, down 0.3% from July.
The Bank of England (BOE) had been hoping for inflation to ease back towards its target of 2% by early 2013.
The inflation fall helps boost cash-strapped Britons' spending power and supporting consumption.
Easing price pressures for furniture, health, household services and clothing helped bring the annual inflation rate down, the ONS said.
Although there were upward inflation blips in March and July, it has fallen since reaching a peak of 5.2% last September.
The upward inflationary pressure comes from climbing oil prices - now nudging a four-month high - along with higher commodity costs.
The United Nations warned recently of rising grain costs due to drought in the United States and inferior harvests in some other primary producer countries.
BOE policymaker Ben Broadbent, who voted against the latest round of quantitative easing in July, has voiced concerns about the underlying inflation pressures.
Still, most economists expect the central bank to increase its purchase of Government bonds beyond the current approved limit of £375bn, once the current £50bn round is completed in November.
:: In a separate release, the ONS said that house prices rose 2% over the 12 months to July - down 0.3% on the year to June.