UK inflation held steady in August remaining unchanged on a month-on-month basis despite the recent drop in Sterling, according to the Consumer Prices Index. 

Overall the average cost of everyday household goods and services was up by 0.6% on a year-on-year basis – slightly less than the 0.7% predicted by economists.

For now it appears that firms are absorbing the impact of the weaker pound and sparing consumers from the impact of .

Mike Prestwood, head of inflation at the ONS, said: “Fuel costs falling more slowly than a year ago as well as rising food prices and air fares all pushed up CPI in August, but these were offset by hotels, wine and clothing leaving the headline rate of inflation unchanged.

“Raw material costs have risen for the second month running, partly due to the falling value of the pound, though there is little sign of this feeding through to consumer prices yet.

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