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. 

The majority of the inflation rise compared with a year ago was from energy bills, which at this time in 2024 were falling sharply from a high base at the Summer 2023 peak. Current energy market pricing suggests that the contribution to year-on-year inflation from energy bills is likely to fade gradually. Services inflation, which the Bank of England looks at closely to see medium-term trends in UK CPI inflation, rose from 4.7% in June to 5.0% in July.

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