Britain's underlying rate of inflation remained steady at 2.9% in August as rising petrol and clothing prices were offset by falling foreign holiday costs, official data showed this morning.
The figure, which was in line with analysts' forecasts, represented the 10th month that inflation was above the Bank of England's target of 2.5% but both the BoE and economists expect inflation to fall in the coming months.
The Office for National Statistics said petrol and oil prices were up 1.1% on the month to stand 3.1% higher than a year earlier, pushing overall goods inflation to 0.6%, the highest for two years.
Within that category, clothing and footwear prices were up 0.6% on a year earlier, the strongest number for six years, as shops felt less need to discount than in the past.
But a fall in the price of foreign holidays this year brought inflation in the dominant services sector down to 4% in August from 4.2% in July, leaving the overall inflation rate steady.
The all-items inflation rate, which includes mortgage interest payments, dropped back to 2.9% last month from 3.1% the month before, due to falling mortgage payments and slower house price inflation.
