The so-called core inflation, where food and energy prices have been excluded, rose to 3.6 percent from 3.3 percent in July. This was also in line with expectations.
Inflation in the service sector rose to 5.6 percent in August, up from 5.2 percent in July – an increase that was also expected and which analysts believe is a temporary effect.
Both service inflation and inflation in the entire economy are below the British central bank's forecasts from August.
The Bank of England is not expected to adjust the interest rate from 5.00 percent in its interest rate decision on Thursday, but the development regarding inflation opens the door for cuts further ahead. In the market, one is counting on British interest rate cuts in both November and December and five more cuts in 2025.