UK inflation holds steady at 0.6% in August despite weak sterling

Expectations of a move higher

UK inflation undershot expectations of a move higher in August, remaining at 0.6%, according to the Office for National Statistics (ONS).

The UK inflation rate, as measured by the Consumer Price Index (CPI), was reported at 0.6% for the year to August 2016 this morning. This was the same rate as July, despite economists expecting a small uplift on the back of the weak pound to 0.7%. Although fuel prices put upward pressure on inflation, this was offset by downward contributions from hotel accommodation, alcohol and clothing prices. Core inflation, which strips out elements such as energy and food, also held at 1.3%, said the ONS. The Retail Prices Index (RPI) measure of inflation dropped to 1.8% in August from 1.9...