Inflation in the UK eased slightly in August, falling to an annual rate of 9.9% from 10.1% in July, easing the pressure on households somewhat – but remained close to the highest rate in 40 years.

Inflation eased because of a fall in petrol and diesel prices while food and clothing became more expensive.

Prices rose by 0.5% in August from July, according to the Office for National Statistics. It said: Food and non-alcoholic beverages made the largest upward contribution to the monthly rates in August 2022, while falling prices for motor fuels resulted in a large offsetting downward contribution.

Rachel Winter, Partner at Killik & Co, said: “UK inflation remained close to double-digits in August, driven by price rises across the economy. This pressure is weighing more heavily on some households, further denting consumer confidence and living standards.

“The newly announced freeze on energy bills means headline inflation is likely to fall short of some of the highest estimates for the final quarter of the year. However, it remains to be seen how upcoming government policy, and particularly tax cuts, will affect the longer-term inflationary outlook.

“The Bank of England continues to face a tough challenge to bring price growth back towards its target level. Policymakers have already hinted that they intend to deliver another increase in the base rate next week, given the ongoing underlying pressures.

“For savers and investors, it is perhaps more important than ever to take expert advice to develop a personalised strategy and ensure the best long-term returns.”