LONDON, Sept. 17 (Xinhua) -- Britain's battle with high inflation showed no relief in August, troubling both businesses and households.
The country's consumer prices rose 3.8 percent in August year on year, matching July's pace and remaining the highest since January 2024, the Office for National Statistics (ONS) reported on Wednesday.
On a monthly basis, prices increased 0.3 percent, the same rate recorded a year earlier, according to ONS figures.
The ONS said air fares made the largest downward contribution to the CPI change, while restaurants, hotels, and motor fuels exerted strong upward pressure.
Food price inflation climbed for the fifth consecutive month, with notable increases in vegetables, cheese, and fish.
The annual inflation rate for food and non-alcoholic drinks hit 5.1 percent, up from 4.9 percent in July and the highest since January 2024.
The persistence of elevated prices is troubling both businesses and households.
"Businesses will be worried by inflation holding at 3.8 percent at a time when cost pressures continue to bite, especially on wages," said Stuart Morrison, research manager at the British Chambers of Commerce (BCC), expecting inflation to stay near this level through year-end.
Morrison warned that April's national insurance rise, strong wage growth, and higher tariffs are eroding margins and could limit interest rate cuts, while possible tax hikes in the Autumn Budget risk further constraining growth.
Retailers are under strain as well. Kris Hamer, director of insight at the British Retail Consortium, noted the rising employment costs, poor harvests, and new levies -- including a packaging tax -- that have added 7 billion pounds (9.56 billion U.S. dollars) in costs this year, and urged a cut in business rates in the upcoming Budget.
Britain's inflation remains far above its European peers. August's 3.8 percent contrasts with early estimates of 0.8 percent in France and 2.1 percent in Germany, and Britain has led both countries' inflation rates every month of 2025.
"Several months of disappointing data has highlighted the UK's unwanted position as an international outlier for 'sticky' inflation, with the highest headline inflation of any G7 economy," said James Smith, research director at the Resolution Foundation, calling on the Chancellor to ease cost-of-living pressures.
Monetary policy faces a careful test. "The Bank of England is nearing the end of its rate-cutting cycle, but faces a delicate balancing act: wage growth is softening, yet household inflation expectations are edging up," said Anna Leach, chief economist at the Institute of Directors.
Martin Sartorius, principal economist at the Confederation of British Industry, expects the Monetary Policy Committee to keep interest rates unchanged on Thursday, adding that its November decision will hinge on whether upcoming data show inflation can be contained without further tightening. (1 pound = 1.37 U.S. dollar) ■
