The rate of Consumer Prices Index (CPI) was 3.8% in August, the same as July, the Office for National Statistics (ONS) said.
This was the level that most economists had been expecting for the month, and it means overall inflation remains elevated above the UK’s 2% target rate.
Airfares coming down after a spike the previous month helped offset petrol and diesel prices rising in August, the ONS said.
NEWS. The State Pension is set to rise 4.7% next April. We know this as it is ‘triple locked’, ie rises by the higher of 2.5% or inflation or average earnings rise. The final figure has just come in, for earnings up to July and it’s the highest of the three, at 4.7%.
So based on…
— Martin Lewis (@MartinSLewis) September 16, 2025
Restaurants and hotels also but upward pressure on the overall rate as demand for meals out and overnight stays stayed high amid a string of popular concerts around the UK.
However, the rate of food and drink inflation rose to 5.1% in August, from 4.9% in July, as shoppers continued to face higher prices for items at the till.
It marks the fifth month in a row that the annual rate has increased and means it is the highest level recorded since January 2024.
Food items like vegetables, milk, eggs, cheese and fish helped put pressure on the overall rate of inflation in August.
ONS chief economist Grant Fitzner said: “The cost of airfares was the main downward driver this month with prices rising less than a year ago following the large increase in July linked to the timing of the summer holidays.
“This was offset by a rise in prices at the pump and the cost of hotel accommodation falling less than this time last year.
“Food price inflation climbed for the fifth consecutive month, with small increases seen across a range of vegetables, cheese and fish items.”
Chancellor Rachel Reeves said: “I know families are finding it tough and that for many the economy feels stuck.
“That’s why I’m determined to bring costs down and support people who are facing higher bills.”
She said the Government was taking action “to put more money in people’s pockets while we work to build a stronger, more stable economy that rewards hard work”.
Why do September inflation figures matter so much for DWP benefits?
The cost of living is always important to our finances but the figures from September, which will come out in early October, usually have a direct impact for millions of people.
The September inflation figure will affect how much the DWP will increase benefits and the state pension will rise, as influencing interest rates and the prices in shops.
Typically, September’s Consumer Prices Index (CPI) measure of inflation, which last year was 1.7%, is the benchmark for raising benefits the following April.
That includes Universal Credit, the most common benefit.
Pensions are different, as they rise using the Triple Lock Formula, but September inflation figures also play a part.
What is the triple lock for pensions?
Under the triple lock guarantee, the DWP State Pension increases every April in line with whichever is the highest of total earnings growth in the year from May to July of the previous year, CPI (Consumer Prices Index) inflation in September of the previous year, or 2.5%.
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The latest figures from the Office for National Statistics (ONS) showed a rise in total wage growth including bonuses to 4.7% in the quarter to July, up from 4.6% in the three months to June.
Millions of pensioners should see a rise of over £500 a year from next April following the latest official earnings data.
While the final piece of the puzzle will not come until inflation figures for September are published in October, it is thought unlikely that the rate of Consumer Prices Index will be higher than 4.7%.
