UK inflation rate eases but still near 40-year high

The UK inflation rate has eased slightly although prices are still continuing to rise at nearly their fastest rate in 40 years.

Inflation – a measure of price rises – dipped to 9.9% in the 12 months to August, from 10.1% in July, the Office for National Statistics (ONS) said.

Soaring living costs are eating into household budgets, with prices rising faster than wages.

The Bank of England has said inflation could peak at more than 13% this year.

Falling petrol prices were the main reason the pace of inflation eased.

Petrol prices fell by 14.3p per litre between July and August, while diesel prices also dipped.

Fuel prices have been surging, driven by the war in Ukraine, and moves to reduce Europe’s dependence on Russian oil.

But wholesale costs fell after fears of a recession in the US hit demand for oil.