UK inflation measured by CPI (consumer price index) has fallen to 2.7% in the year to August, from 2.8% in July. This has been put down to a slower rise in fuel costs. However RPI (retail prices index) rose to 3.3% in August from 3.1% in July. RPI takes into account mortgage payments etc.
The bank of England has stated that it could raise rates if it sees inflation remaining above 2.5% for the foreseeable future.
