UK CPI inflation in August 2025 remained at 3.8%, the same as in July, due to higher food, restaurant and hotel prices. This was in line with analysts’ expectations, as surveyed by Reuters beforehand. Food and drink price rises were a key driver again, with their prices rising 5.1% annually, compared with 4.9% in the year to July. Restaurant, hotel, and petrol prices rose, while there was a sharp fall in airfares that helped keep CPI inflation flat overall. Services inflation, which the Bank of England closely watches as a measure of medium-term domestic price pressures, eased from 5.0% in July to 4.7% in August.

Core CPI inflation, which excludes energy and food prices that spiked during 2022, slowed from 3.8% in July to 3.6% in August. 

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