UK inflation holds steady at 3.8% in August

Business Sep 17, 2025

UK inflation stayed put at 3.8% in August 2025, right on target with predictions and just before the Bank of England's big interest rate call.
Even though air fares became cheaper, that was balanced out by pricier fuel, eating out, and groceries.

What does this mean for interest rates?

The Bank of England is juggling stubbornly high prices while the job market cools off.
They're worried people might start asking for bigger paychecks if they expect costs to keep rising.
With inflation set to hit 4% in September—twice the official goal—the bank may leave interest rates at 4%, signaling a pause on any cuts for now.
Markets will be watching closely for what comes next.