As we've been reporting, the latest inflation rate stayed at 3.8% in July - but the cost of food continued to climb more steeply.

We have been looking at the finer details in the ONS's consumer price inflation tables, which show which products are getting more expensive most quickly.

Image source, Reuters

James Smith covers the UK economy for the investment bank ING and has been on BBC Radio 4's Today programme sharing his initial reaction to today's inflation figures.

"It is certainly not good news for the Bank of England," James says. "3.8% is well above their target and of course the prospect of further interest rate cuts hang in the balance."

Commenting on rising food prices, he says: "Over the last few months, if you think about what is a big input for supermarket prices - it is wage costs.

"We have seen those tax rises come through, the big rise in national living wage as well. I think that is filtering through to what we are seeing in restaurant prices too."

Alcohol and tobacco inflation over the year to August stands at at 5.9%, slightly up from July's figure of 5.7%.

Clothing and shoes inflation fell slightly to 0.2%, down from 0.3% in the year to July.

The increase in the cost of going to restaurants and hotels went up. The yearly inflation rate to August was 3.8%, compared to 3.4% in July.

Better news for transport: prices rose overall by 2.4% in the 12 months to August 2025, down from 3.2% in the 12 months to July.

Housing and household services inflation stands at 6% compared with 6.1% for the year to July.

The rate of inflation in the communication sector was 6.1% - the same as last month's figure - while inflation in the education sector also remains high but unchanged at 7.5%.

Dearbail Jordan
Senior business and economics reporter

Tom Egan, who co-founded and runs Coosh Bakery in Mapperley, Nottingham, with his wife Rachel, has first-hand experience of rising food prices, especially staples such as butter and chocolate.

Adverse weather conditions in cocoa-growing countries such as Ghana has "more than doubled" the price he pays for supplies.

He continues: "I think previously we were paying somewhere in the region of £60 for 10 kilograms... it has now gone up to over £150 for that same 10 kilograms."

Simultaneously, his butter prices have risen by 50%.

Tom says the rise in the amount of National Insurance that employers have to pay following last year’s Budget means the bakery has "been stung a little bit".

The chancellor hiked the rate while promising not to tax working people - but Tom says: "Rachel and I, we’re both working people as well, and that essentially just comes out of our profit."

The picture means he is "cautious" about expanding his business, including investing in new equipment.

Image source, EPA

Food and drink manufacturers have highlighted the increase to employers' National Insurance Contributions and the new packaging tax as among the key reasons prices have gone up.

The chief executive of the Food and Drink Federation, Karen Betts, says rising prices are "concerning" when commodity and energy prices are fairly stable.

Her organisation's members include dozens of food manufacturers, including Nestle, Unilever and Cadbury.

She says there are still "notable pressures on coffee, cocoa, olive oil and dairy prices" - but adds "otherwise the continued rise is explained by regulatory and tax costs".

Michael Race
Business and economics reporter

Image source, EPA

Delving further into the inflation stats, you can see that fuel prices have ticked up in the past month, but remain much lower than in August last year.

The average price for a litre of petrol was about £1.34 in August, down from £1.42 a year earlier.

When it comes to diesel, the average price was £1.42 per litre last month, down from £1.49 in August 2024.

Like food, fuel prices are a key driver behind the rising cost of living, given most people have to buy it – but we are far from the prices we saw following the outbreak of the war in Ukraine three years ago.

Marc Ashdown
Business correspondent

What have we learned from today's data? Anyone doing their weekly shop will still feel prices creeping up, just not quite as quickly as at times over the past few years.

Services accounts for 80% of economic output, so a slowing in price rises will be a welcome relief. Eating out or a trip to the cinema remains a treat for households keenly aware of making their money go further.

Airfares were a bit of an anomaly over the past few months – and a 2% rise in August compared to 22% in July perhaps says more about the data collection methods than what passengers actually felt when booking.

Taken with a cooling labour market – albeit with wage growth still on the warmer side for the Bank of England’s liking – rate setters are highly unlikely to cut the base interest rate tomorrow.

One more cut before the end of the year remains a possibility, but much will depend on the run-up to the budget as winter costs start to ramp up - and, of course, assuming there are no big surprises at home or abroad.

The ONS says the estimate for inflation in France during the year to August is 0.8%, while in Germany the rate for the same period is expected to be 2.1%.

UK inflation has been higher than those two countries in every month so far this year.

Yael Selfin, chief economist at KPMG UK, said Britain has become an "outlier in recent months on inflation compared to other major economies".

She says inflation is being driven by businesses passing on the cost of National Insurance Contributions to consumers, which is "feeding through" into higher inflation.

As a reminder, the government has increased the amount employers need to pay into the National Insurance system, which ministers estimate will raise £25bn a year.

Michael Race
Business and economics reporter

Rising employment costs and poor harvests have driven up retailer's bills, according to the industry body representing supermarkets.

There have been various warnings in recent months from farmers over weak harvests because of heatwaves and spells of drought over the summer.

On top of that, all employers have faced a rise in the amount they are required to pay in National Insurance and minimum wages, which is likely to have been passed onto customers through higher prices.

Kris Hamer, of the British Retail Consortium, says: "With food inflation now outpacing wages, many families will be struggling with the rising cost of living."

Earlier this week, the boss of Aldi warned the government that any further measures in this year’s Budget that further increase costs on employers could lead to higher food prices.

Image source, PA Media

Shadow chancellor Sir Mel Stride calls today's announcement "deeply worrying for families".

"This is the eleventh consecutive month inflation has exceeded the 2% target," Stride says.

He says Labour's tax policies are "stoking inflation" and accuses the government of being "distracted" by recent scandals.

Image source, PA Media

Reacting to this morning's figures, Chancellor Rachel Reeves says the government wants to "put more money in people’s pockets while we work to build a stronger, more stable economy".

“I know families are finding it tough and that for many the economy feels stuck," she goes on.

"That’s why I’m determined to bring costs down and support people who are facing higher bills."

Michael Race
Business and economics reporter

Inflation remaining at a higher level almost certainly means the Bank of England will hold interest rates tomorrow.

That’s the chat from many economists this morning, with some suggesting rates won’t be cut again at all this year.

The Bank uses interest rates as a tool to slow price rises for consumer goods in an effort to control the cost of living.

The theory is that by increasing borrowing costs, people will cut back on spending and demand, therefore slowing down price rises for goods.

But even when the inflation rate falls, it doesn’t mean things are getting cheaper – it’s just that prices aren’t rising as quickly.

Michael Race
Business and economics reporter

While the UK’s overall inflation rate remained unchanged in this morning's announcement, food price inflation continued to rise for the fifth month in a row.

Food prices have gone up 5.1% in the year to August - meaning a supermarket shop that cost you £100 this time last year would be £105.10 now.

There were small price increases seen across a range of vegetables, cheese and fish, according to the Office for National Statistics, which releases the figures.

Food prices spiking have been a key driver behind households feeling the strain of the cost of living in recent years, so the fact they are rising at pace again will not be welcome news.

Kevin Peachey
Cost of living correspondent

We have official inflation figures - but remember, everyone has a personal inflation rate.

The ONS data is based on a huge basket of goods and services but, for individuals, how their income is spent is crucial.

People on lower incomes, for example, will spend a greater proportion of income on essentials.

So, if the inflation rate is driven by the cost of food or fuel, then that can have an even bigger impact on personal finances than, say, something like air fares.

Image source, EPA

An initial look at the figures suggests one of the factors keeping inflation stubbornly high is the prices we all pay at the supermarket.

The ONS says food inflation hit 5.1% in the 12 months up to August, the fifth month in a row the rate has climbed.

The UK's rate of inflation held steady at 3.8% in the 12 months to August, the Office for National Statistics has announced.

We're looking into what's going on with prices and will bring you more very shortly.

Last month's figures saw inflation climb to 3.8%, which was higher than expected.

Air fares and food prices were the driving forces behind that.

The Bank of England predicts a peak of 4% in next month's numbers, so any sharp jump in this morning's data would certainly surprise economists.

We'll find out at 07:00 - stick with us while we dig into the story behind the data.

Dearbail Jordan
Senior business and economics reporter

Average prices have been ticking higher since April when a bunch of household bills rose.

Before that, inflation had been falling pretty steadily since hitting a 40-year peak of 11.1% in October 2022, when factors such as Russia’s full-scale invasion of Ukraine pushed-up energy costs.

Sometimes there are one-offs that can send inflation higher but a constant accelerant has been food prices.

The cost of food and non-alcoholic drinks rose 4.9% in the year to July. Compared to five years ago the jump is even more startling: they increased by 37%.

There are a number of reasons why food and drink inflation has been increasing but this week the boss of Aldi UK warned that increases in National Insurance Contributions by employers, as well as the cost of new packaging rules to fund recycling, had already "rippled through to prices on the shelf edge".

Dearbail Jordan
Senior business and economics reporter

Inflation is a measure of how quickly prices are rising - or very occasionally falling - for goods and services.

For example, if a bottle of milk costs £1 but is £1.05 a year later, then the annual rate of inflation for it would be 5%.

The inflation figure is released every month by the Office for National Statistics. Sometimes you might see a headline which says “inflation is slowing” - that doesn’t mean that prices are going down, it just means they are not rising as quickly as they did before.

If inflation is rising, everyday costs such as food or fuel is more expensive - and that means that £1 does not stretch as far as it once did.

Dearbail Jordan
Senior business and economics reporter

Image source, PA Media

The Consumer Price Index (CPI) measure of inflation is expected to show a 3.8% rise for the year to August.

If so, it would be the same pace recorded for the 12 months to July. That’s the good(-ish) news.

The bad news is inflation is expected to rise to 4% in September when those figures are announced next month, which would mean it is double the Bank of England’s 2% target.

The upshot of this is it is unlikely the Bank will cut interest rates on Thursday. The committee is meeting this week to discuss the next move and there’s speculation there might not be a further reduction for the rest of the year.

It’s not something people buying a home or re-mortgaging are going to want to hear but savers will probably welcome it.

Since August late year, the Bank has cut interest rates five times to the current level of 4%, which is the lowest level for two years.