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| UK inflation rate eases to 1.8% | |
| (21 minutes later) | |
| UK inflation fell slightly in August, helped by cheaper energy bills and lower clothing costs. | |
| The Consumer Prices Index (CPI) fell to 1.8% in August - its lowest level in more than a year - from 1.9% in July. | |
| The rate is below the government's 2% target, and the fall is likely to add to expectations that UK interest rates have peaked. | |
| However, the RPI inflation measure - which includes mortgage interest repayments - rose to 4.1% from 3.8%. | However, the RPI inflation measure - which includes mortgage interest repayments - rose to 4.1% from 3.8%. |
| The Bank of England has raised interest rates five times since August 2006 in an effort to cool inflation in the economy. | |
| Rate help | |
| Analysts said the latest inflation figures would be encouraging for the Bank of England, and made it more likely that there would be no more interest rate rises in the current cycle. | |
| The current turmoil in the financial markets has also made the Bank reluctant to raise interest rates in the next few months, experts belive. | |
| "I don't think we are going to get a rate cut this year, but this does give the Bank some leeway," said Ross Walker, an economist at RBS. | |
| "If they need to cut rates, this helps." | |
| The fall in CPI inflation was helped by some mortgage lenders cutting the levels of their mortgage exit fees. | |
| Cheaper gas and electricity bills also helped to keep inflation under control as a number of advertised reductions from major energy suppliers came into effect. |