UK inflation drops in August on falling transport costs

UK CPI inflation fell from 2.8% to 2.7% in August, in line with economists' expectations, as falling transport costs pushed the headline figure down.

The Office for National Statistics (ONS) said the fall was attributable to smaller rises in the price of both petrol and airline costs compared with those seen in August 2012. RPI inflation, however, rose slightly more than expected to 3.3%, up from 3.1% in July. RPIJ, the ONS' 'improved measure' of RPI, remained constant at 2.6%, while core inflation held steady at 2%. The other main inflation measure was also unchanged between July and August, with CPIH (CPI including housing costs) constant at 2.5%. "These latest numbers continue the trend of broadly steady inflation seen sin...