UK inflation increased by 3.8% in the 12 months to August, the Office for National Statistics (ONS) has revealed.
The latest figure is unchanged from July, following consecutive increases in consumer price index (CPI) inflation from May.
Monthly CPI inflation rose by 0.3% in this period, remaining unchanged from August 2024 and increasing from 0.1% in July 2025.
The ONS stated that air fares made the largest downward contribution to the monthly change in CPI annual rates, while hotels and restaurants, and motor fuels made “large, partially offsetting” upward contributions.
Personal finance analyst at Bestinvest, Alice Haine, said that the latest inflation update offers "little relief for cash-strapped households still grappling with overstretched budgets", and will be "unwelcome news" for the Chancellor, Rachel Reeves, ahead of the Autumn Budget in November.
She stated: "Stubborn inflation is worrying for consumers as it means prices are still very much on the rise, they are just increasing at the same pace as the previous month. Add to that the extended freeze on income tax thresholds, where more people find themselves dragged into higher tax brackets as their wages rise, and household budgets will continue to feel stretched.
"Building a strong financial foundation is key in terms of uneconomic uncertainty."
The latest inflation announcement comes ahead of the next Bank of England base rate announcement, which is scheduled for 18 September. The base rate was cut from 4.25% to 4% last month.
Chief executive officer at Black & White Bridging, Martyn Smith, said the latest inflation rate update could be a "game changer" for prospective borrowers waiting for a better deal.
He concluded: "It’s now critical the Bank of England cuts the base rate again tomorrow to instil further confidence in these borrowers and help landlords and other businesses currently struggling under the weight of high interest rates.
"We must increase opportunities for investment. We must boost borrowing. We must give borrowers a chance."
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