The UK rate of inflation has dropped back down to 0% in August, as oil prices continue to affect price growth in England.
The rate has fallen from 0.1% in July, according to figures released today by the Office for National Statistics.
Oil prices hit a six-and-a-half year low of around $42.50 per barrel in late August, causing speculation that price pressures will remain low over the next six months. The figures are the latest in a series of disappointing economic data releases, which means the Bank of England is likely to push back a rate rise.
“With consumer price inflation flat in August and core inflation easing back to 1.0%, there is little immediate pressure on the Bank of England to start raising interest rates,” Howard Archer, chief UK and European economist at IHS Global Insight told the BBC.
“Further reason for Bank of England caution on interest rates is the recent evidence that the economy has hit a soft patch during the third quarter,” he said.
Consumer prices rose 0.2 percent on the month but were unchanged from a year earlier, the Office for National Statistics said, in line with economists’ expectations for a slight fall in annual inflation from 0.1 percent.
Core inflation, which ignores volatile moves in the price of energy, food, alcoholic drinks and tobacco, rose by an annual 1.0 percent in August.
