The UK's rate of inflation held steady at 3.8% in the 12 months to August, the Office for National Statistics has announced. We're looking into what's going on with prices and will bring you more very shortly.

Prices in the UK rose by 3.8% in the year to August, matching the rate recorded in July. It means inflation remains well above the Bank of England's 2% target. The Bank moves interest rates up and down to try to keep inflation at that level,

The rate of Consumer Prices Index was 3.8% in August, the same as July, the Office for National Statistics said.

This was the level that most economists had been expecting, although the cost of the weekly food shop continues to rise. The rate of food and drink inflation rose to 5.1% in August, from 4.9% in July. This represents the fifth month in a row that the annual rate has increased and means it is the highest level recorded since January 2024.

Inflation is more or less at a peak, though it's likely to stay in the 3.5-4% area for the rest of this year. Rising food inflation is a particular bugbear of the Bank of England. Yet we aren't in the camp that thinks rate cuts are over, given the prospect of further progress in services inflation and wage growth.

The UK’s annual inflation rate held steady at 3.8% in August 2025, unchanged from July and remaining near the highs last seen in January 2024, in line with expectations. Inflation accelerated for restaurants and hotels, food, and furniture, household equipment and maintenance.