LONDON, Sept 13 British inflation unexpectedly
held steady in August, keeping the chance of another Bank of
England rate cut on track despite a big rise in raw material
costs after June's vote to leave the European Union.
The annual rate of consumer price inflation was unchanged at
0.6 percent in August, compared with economists' forecast for it
to increase to 0.7 percent, the Office for National Statistics
said on Tuesday.
Lower prices for clothing, hotels and wine offset an upward
effect from fuel prices, food and airfares.
"Raw material costs have risen for the second month running,
partly due to the falling value of the pound, though there is
little sign of this feeding through to consumer prices yet," ONS
statistician Mike Prestwood said.
Last month the BoE said sterling's 10 percent fall against
the dollar and the euro after the EU vote was likely to put
upward pressure on prices for several years and cause inflation
to overshoot its 2 percent target.
But the central bank said most policymakers still expected
to cut rates again later this year, although no further action
is expected at this week's rate-setting meeting.
A purchasing managers' survey earlier this month showed
firms in the services sector were raising prices at the fastest
rate since early 2014, while manufacturers reported the biggest
increase in input costs in five years.
Producer price data from the ONS on Tuesday showed
manufacturers' input costs rose 7.6 percent compared with a year
earlier, the biggest jump since December 2011.
But they raised the prices they charged by just 0.8 percent,
less than economists expected, though still the biggest increase
since January 2014.
(Reporting by David Milliken and William Schomberg)