The Consumer Prices Index stood at 3.8% last month, the same level as in July, the Office for National Statistics said in a statement.

The figure was in line with analysts’ forecasts.

The BoE trimmed borrowing costs in August to 4%, its lowest level in 2.5 years, but is widely expected to maintain its key interest rate on Thursday and for the remainder of 2025.

The Labour government faced a fresh blow last week as data showed the economy stagnated in July, which came at the end of turbulent week politically for prime minister Keir Starmer.

Official data on Tuesday brought more bad news, showing UK unemployment remaining at a four-year high at 4.7%.

While the July GDP figure was in line with market expectations, the government acknowledged difficulty in driving economic growth, ahead of its annual budget announcement in late November.

The BoE expects inflation to peak at 4% in September, twice its 2% target.

“I know families are finding it tough and that for many the economy feels stuck,” said finance minister Rachel Reeves, who has promised to keep a “tight grip” on public spending.

Britain’s economy has struggled to grow after Reeves hiked taxes and slashed public spending following Labour’s general election win in July last year.

Several US tech giants, including Microsoft and Google, this week unveiled investments in the UK as President Donald Trump arrived for a state visit to the country.

“Today’s figures underline the higher-for-longer interest rate environment,” said Lindsay James, investment strategist at Quilter.

“That will keep pressure on households already contending with elevated living costs and on businesses facing squeezed demand,” she added.