CPI remains at 3.1pc

Consumer price inflation held steady in August, after unexpectedly strong rises in airfares, clothes and food prices offset falling fuel costs, official data showed.

The Office for National Statistics (ONS) said consumer price inflation came in at 3.1 per cent last month in contrast to economists' expectations for a fall to 2.9 per cent. On the month, inflation jumped by 0.5 per cent, compared to a 0.2 per cent fall in July and forecasts for a 0.3 per cent increase.

The largest upward effect on CPI came from air transport, with fares rising at their fastest pace for a month of August on record.

Clothing and footwear prices saw their sharpest August rise since 2001, with a big impact from the cost of women's outerwear at the start of the autumn season.

Seasonal discounting occurred earlier in 2010 than in previous years, adding to the upward pressure in August.

Food prices rose at their fastest annual pace since July 2009, with strong monthly rises in the cost of bread, cereals and vegetables.

Producer price data earlier this month showed sharp increases in the cost of wheat due to drought in Russia pushing up global commodity prices.

The alternate retail price index measure, which has a longer history and includes more housing costs, was also higher than expected in August. The measure fell to 4.7 per cent from 4.8 per cent, against expectations of a drop to 4.6 per cent.

The figures are likely to be a concern to the Bank of England, which has blamed the rise of inflation above its two per cent target largely on one-off factors such as sterling weakness and a rise in value-added tax at the start of the year.

Bank Governor Mervyn King had to write a public letter last month explaining why inflation had persisted above three per cent. New member of the Monetary Policy Committee Martin Weale faces a hearing before legislators later.

Howard Archer of global Insight said: "Consumer price inflation disappointingly only held steady at 3.1 per cent in August, thereby bringing at least a temporary end to the gradual downward trend from the peak of 3.7 per cent in April."