We're ending our live coverage now - thanks for reading. Today's top lines:

• Inflation slowed to 6.7% in the 12 months to August - down slightly from 6.8% in July
• It means prices are still rising, but at a slower rate
• The figure was a surprise to most economists, who had expected a slight rise, due to increasing petrol and diesel prices

• Core inflation, which strips out food and energy, slowed to 6.2%
• Price rises for food and non-alcoholic drinks also eased to 13.6% in the year to August
• Chancellor Jeremy Hunt said it was a sign the government's plan was working - "plain and simple"
• But Labour said that the dip would mean "very little to families across the countries that can't afford to pay their bills"
• Some analysts suggested it could change the Bank of England's interest rate decision, which is due tomorrow at midday

Want to read more? Our full write up with all of the key numbers and reaction is here.

Today's writers were Lora Jones, Gem O'Reilly, Suneil Asar, Tara Mewawalla, and Owen Amos.

Douglas Fraser
Scotland business & economy editor

Image source, Getty Images

While overall food price inflation in the UK has dropped to 13.6% in the year to August, the ONS figures show wide variations.

From July, there were falls in the price of milk, cheese, vegetables and fish.

But over the 12 months, the price of sugar rose 56% - and it has been accelerating.

Another big riser, olive oil, was up 38%, but that has slowed up.

While meat prices rose 11.9% in the year, pork prices rose at 22%. And while pizza prices were barely up, pasta and couscous were up 24%.

Alcohol prices have been rising well below inflation, until last month. Duty, or tax, rose at the start of August, taking the average 12-month price rise up 9.2%.

Within that, fortified wine such as sherry was up more than 14%, beer by 13.5%, spirits by 8.6% and wine by 7%.

Gem O'Reilly
Live reporter

According to today's ONS figures, the average price of petrol rose by 5.3 pence per litre between July and August 2023, to stand at 148.5 pence per litre.

And Simon Williams, head of policy at the RAC, says the rise has continued into September.

"The price of petrol has increased by 10p a litre and diesel by 13p a litre since the beginning of August."

Williams said says retailers' prices are too high compared to the wholesale price for petrol.

"It should be coming down by 4p or 5p a litre," he says.

"At the moment retailers are taking bigger margins on petrol and therefore petrol drivers are missing out."

Williams says overall prices ars rising because "oil production is being curbed the Saudis and the Russians.

"That's caused the price of a barrel to go up and that means fuel becomes more expensive."

Tara Mewawalla
Live reporter

We've been focusing on inflation - but let's now take a look at the data on house price growth published by the Office for National Statistics today, external.

House prices increased by 0.6% in the 12 months to July, slowing from a 1.9% increase in the months leading up to June.

The ONS said the average UK house price in July 2023 was £290,000 - that's slightly down from a recent peak in November 2022.

But it's important to remember this is not the only data on house prices.

As we have reported at the start of the month, Nationwide says house prices were 5.3% lower in August this year compared to last year.

Nationwide said that average house prices in the UK peaked at £273,751 in August 2022 but fell to £259,153 last month.

It is important to note that the building society's figures only take into account buyers with owner mortgages - and do not include those who purchase homes with cash or buy-to-let deals.

Because cash buyers currently account for over a third of housing sales, this could lead to a difference in house price growth figures.

What progress has the PM made on his five promises?published at 11:15 British Summer Time 20 September 2023

11:15 BST 20 September 2023

Image source, Getty Images

In January, Prime Minister Rishi Sunak set out his five priorities for 2023.

His top goal is to halve inflation - the increase in prices over time - by the end of 2023.

Inflation was at 10.7% in the three-month period between October and December 2022, which means the government aims to reduce inflation to 5.3%.

It uses a measure called the Consumer Prices Index, which tracks the price of a typical basket of goods.

At the time the prime minister made the pledge, many experts expected inflation in the UK to drop sharply - but it did not fall as quickly as expected in the first half of 2023.

As we've been reporting, in August, CPI fell slightly to 6.7% from July's figure of 6.8%.

Despite the recent falls, analysts remain divided about whether the PM's goal will be achieved, external.

However, the Bank of England said in August , externalthat it expected inflation to be about 5% by the end of the year, which would meet the target.

Read more about how Rishi Sunak is faring on his other pledges here.

The slight drop in inflation is good news for the government - but Chancellor Jeremy Hunt insists it "means no borrowing binge, which would simply keep interest rates higher for longer".

So how much has the government borrowed recently?

The amount it borrows varies month to month, and the pandemic pushed debts up hugely.

In July this year, the government borrowed £4.3bn, which was the fifth-highest borrowing figure for July since records began in 1993.

In the wider 2022 financial year, the government borrowed £130.6bn. That was £9.4bn higher than the previous year.

Read more on why governments borrow money - and why it matters - here.

Elsewhere, the Office for National Statistics has just published data on private rental prices in the UK., external

Prices paid by tenants increased by 5.5% in the 12 months to August - the biggest annual increase since they began collecting the data in 2016.

That compares to an annual rise of 5.3% in July.

Within England, London had the highest annual percentage change at 5.9%. That's the highest annual rate rise since the London data series began in January 2006.

Read some tips on your renting rights here.

Our personal inflation calculator here, built by the Office for National Statistics in collaboration with the BBC, shows you what the new numbers mean for your household.

Priya Patel
Economics producer

Ben Squire of Plymouth Boat Trips, a ferry and cruise passenger boat firm, owns seven vessels.

He says rising fuel costs means it’s becoming harder to make any money.

Although he’s raised ticket prices, he hasn’t been able to match inflation, as he knows customers also have squeezed budgets.

His company also fish for scallops to sell to local restaurants.

"If fuel keeps going up, the net revenue, the engineers, the suppliers of fishing equipment, and boat yards, will all suffer," he says.

Meanwhile, Nick Collins runs Lounges PLC, which owns cafes, bars, restaurants and roadside diners across the UK.

Rising food costs have forced him to increase prices by 8% across the business over the last year.

"In normal years, we'd increase our prices by around 1.5% or 2%," he says.

But he says he has seen "absolutely no shift in customer behaviour" and people are not "tightening their belts".

"If people were... you'd see fewer people out at the start of the week. You'd see less spending as you approach payday... we haven't seen any of that."

When the rate of inflation falls, it does not mean prices are coming down - it means they are rising less quickly.

And as the chart shows, prices vary by sector - transport is cheaper than a year ago, for example, while food is still much more expensive.

Here's a quick recap of this morning's news:

• Slowing food prices helped drive a surprise fall in inflation in August - most economists had expected another rise
• Inflation fell to 6.7% in the year to August, down from 6.8% in July
• Despite food price rises slowing down, food and non alcoholic drinks were the biggest contributor to inflation
• Price rises for milk, cheese and eggs slowed the most, while fish and vegetable prices also eased
• There was a jump in fuel prices - but it was partially off-set by lower costs for second-hand cars and air fares
• The data showed the average price of petrol rose by 5.3 pence per litre between July and August, to stand at 148.5 pence
• Diesel prices rose by 5.9 pence per litre to 151.1 pence

The Bank of England will announce tomorrow whether the base rate will change from 5.25%.

As a reminder - a higher base rate generally leads to higher interest rates on mortgages, which weakens mortgage holders' spending power.

In response to today's surprise fall in inflation, the Trades Union Congress says it's not the time for another rate rise.

"A halt to interest rate rises is long overdue," says Paul Nowak, general secretary.

"Pushing interest rates so high that the economy is driven into recession will only make the current crisis worse, costing people their jobs and their homes."

Labour's shadow chief secretary for the Treasury, Darren Jones, says the surprise fall in inflation is "nowhere near" enough.

The 0.1% drop in inflation is far from what firms were hoping for according to Martin McTague, national chair of the Federation of Small Businesses (FSB) - though he does say there will be relief it didn't go up.

"The core inflation drop is good news, although the fact that fuel contributed the most on the upward side to inflation is a concern," he says.

If pump prices rise further it will have a knock-on effect, he says.

“Small firms are living with the effects of inflation that has been far higher than the target for many months now, so today’s inflation results aren’t enough alone to remove their worries."

Robert Cuffe
Head of statistics

Image source, Reuters

The official inflation measure uses shelf prices, not the price you pay on the till. So, it misses loyalty card discounts offered by supermarkets.

This becomes more important when the number of people using loyalty cards increases or when the discounts get steeper, which is exactly what’s happened this year.

That’s the case even if you suspect, as consumer group Which? does, that the shelf prices aren’t always a fair reflection of the “true” price.

Harvir Dhillon, of the British Retail Consortium, says it means that the official rate of inflation is “slightly overstating” food price rises.

This quirk isn’t the difference between “normal” inflation and the crazy rates we’re experiencing.

But it does mean that the official stats are slightly out of sync with what you’re seeing at the till.

Good news, but notes of cautionpublished at 08:53 British Summer Time 20 September 2023

08:53 BST 20 September 2023

Faisal Islam
Economics editor

The good news is that all the measures of inflation are now going in the right direction.

They remain very high, and higher than other comparable countries, but it was quite a drop in the rate of services inflation and core inflation - which give a better idea of what will happen in the future.

A note of caution however arises from two sources.

In the markets for crude oil, prices are rapidly rising again (see below) which is affecting prices at petrol pumps, and will add to inflation in the coming months.

And also from the IMF, which has just released an in-depth study of the experience of the 1970s energy shocks.

The bottom line is this - countries have a tendency for “premature celebration” - thinking that inflation is defeated, when it is only taking a breather.

The end result was inflation remained higher for longer back then. It fears something similar now.

Fuel prices lower than a year ago, but fuel inflation up - why?published at 08:34 British Summer Time 20 September 2023

08:34 BST 20 September 2023

Fuel inflation is bucking the trend - it’s up.

And that’s slowing down the improvements we’re seeing in inflation overall.

But petrol and diesel prices are down since last August. How can that be?

It’s because the year-on-year changes in fuel prices that determine the inflation number have slowed down significantly.

From July 2022 to July 2023, petrol fell by about a quarter (from a peak of £1.89 per litre to £1.43). You can see that in the blue dots below.

But August to August, they didn’t fall nearly as much (from £1.75 to £1.48) - the fall for the red dots is smaller.

And since the fall is less impressive, fuel inflation is looking worse.

Part of the reason for shallower year-on-year fall is a rise in petrol and diesel prices this August.

But it’s mainly because the huge fall from last July’s peak price is no longer being counted.

So it’s fair to describe some of this as a “blip” - as long as fuel prices settle down.

Dr Sushil Wadhwani, a former member of the Bank of England's Monetary Policy Committee (MPC), which sets interest rates, tells the Today programme the data brought "good news".

"I think it makes it less likely that the Bank of England will need to raise interest rates tomorrow," he says.

"The Bank last time told us that there were three things that they were looking at. They were looking at whether the labour market was loosening. They were looking at what would happen to services inflation, and they would look at wages.

"Now two out of those three things have gone favourably in the sense that the labour market has loosened more than they thought, services today came in below their forecast."

Here's some more from Grant Fitzner, the chief economist from the Office for National Statistics, on what's behind the surprise fall in UK inflation.

"One is that restaurant and hotels fell in the month, that was driven by cheaper overnight hotel accommodation," he tells the Today programme.

"Now, that's a volatile series, so not necessarily indicating that much about future inflationary trends.

"Secondly, although we saw food and non-alcoholic beverage prices increase a little in August, they were again lower than this time last year... and then finally, we normally see an increase in airfares in August, but this time we saw a 2.1% fall.

"So, you put those three factors together and that's led to a small decrease in headline inflation."

Better than feared - but interest rate rise still likelypublished at 08:09 British Summer Time 20 September 2023

08:09 BST 20 September 2023

Faisal Islam
Economics editor

These inflation numbers are better than feared.

The chancellor had expressed concerns of a “blip” or a rise, but the main rate of inflation fell a touch.

While at 6.7% inflation remains high and well above target, it has now fallen for three months on the trot.

Other measures of inflation that give a sense of how long the price shock will last, are also again falling.

All in all, this will give some support to those at the Bank of England who want to limit further interest rate rises.

Another rise tomorrow to 5.5% is still likely - but that could be the last one.