CPI inflation fell by 0.2% in August, down to 9.9%, against most expectations.

However, UK inflation is still close to its highest rate in 40 years.

The Office for National Statistics (ONS) 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.

Simon Webb at LiveMore, the over 50s mortgage lender, said: “Now that the energy price cap has been reduced by the new government to £2,500 from October, inflation is expected to be dampened to some extent.

“However, this is almost twice as high as this time last year when the energy price cap was set at £1,277, so many people are still experiencing significant increases in their cost of living.

“It is inevitable that the Bank of England will raise base rate next week, the question is by how much? The industry guess work is anywhere between 0.5% and 0.75%. Whatever the increase, let’s hope it’s sufficient to help contain inflation and avoid tipping the base rate environment into territory not seen for 14 years.”