Annual consumer price inflation in the U.K. came in at 1.7% in August, marking its lowest rate since late 2016 and falling short of the Bank of England's 2.0% inflation target, data from the Office for National Statistics showed.
The latest print was lower than the 1.9% consensus estimate of economists polled by Econoday, and was well below July's reading of 2.1%.
The decline in inflation was primarily attributable to a fall in computer game prices and a slowdown in clothing price growth following the end of summer sales, according to ONS head of inflation Mike Hardie.
The country's consumer prices index including owner occupiers' housing costs rose 1.7% year over year in August, down from 2.0% registered in July. Annual growth in house prices eased to its lowest level since September 2012, Hardie noted.
Housing and household services, which have been the largest upward contributor to inflation since November 2018, registered a 1.9% annual increase, matching July.
The largest downward contribution came from a range of recreational and cultural goods and services, clothing and sea fares.
In its latest monetary policy decision, the Bank of England said it expects inflation to fall temporarily below its 2% target later this year owing to recent falls in energy prices.
Separately, annual producer prices in the U.K. advanced 1.6% in August, down from the upwardly revised 1.9% rise recorded in July and the Econoday consensus estimate of 1.7%.
On a monthly basis, producer prices edged down 0.1%, compared with a 0.3% increase recorded in July.
