U.K. inflation returned to zero in August as expected on slower growth in clothing prices, data released by the Office for National Statistics showed Tuesday.
Consumer prices remained unchanged in August from a year ago, following a 0.1 percent rise in July.
The official inflation target of the Bank of England is 2 percent and the bank has estimated inflation to return to the target level within two years.
Consumer prices advanced 0.2 percent on a monthly basis as expected by economists, offsetting 0.2 percent fall in July.
Core inflation that excludes energy, food, alcoholic beverages and tobacco, eased to 1 percent in August from 1.2 percent in July.
Another report from ONS showed that factory gate prices fell 1.8 percent in August from a year ago, compared with a fall of 1.6 percent in July. Prices were expected to ease by 1.7 percent.
On a monthly basis, output prices dropped 0.4 percent, bigger than July’s 0.1 percent fall. It was also larger than the expected decrease of 0.2 percent.
Input prices plunged 13.8 percent from last year after falling 12.6 percent in July. Economists forecast a 13.6 percent annual fall.
Month-on-month, the decline in prices deepened to 2.4 percent from 1.2 percent a month ago. The pace of decline matched expectations.
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