The ONS Consumer Prices Index (CPI) rose by 3.8% in the 12 months to August, unchanged from July. On a monthly basis, CPI rose by 0.3%, the same rate ast August 2024.
The Consumer Price Index including owner occupiers’ housing costs (CPIH) rose by 4.1% in the 12 months to August 2025, down from 4.2% in the 12 months to July, and rose by 0.3% in August 2025 compared to 0.4% in August 2024.
The hold in CPI was welcomed as ‘a surprising but positive development’ by Simon Webb, managing director of capital markets and finance at LiveMore, ‘unexpected and positive’ by CEO of Just Mortgages and Spicerhaart John Phillips, and ‘positive news’ by Propertymark CEO Nathan Emerson.
Emerson commented:
“Considering the Bank of England had predicted that inflation could stand at 4 per cent this month, it is positive news to see aspects have remained steady overall, and that we have witnessed three base rate cuts across the year to date, all of which have helped consumer affordability.”
LiveMore’s Webb added:
“With the market widely expecting inflation to rise, today’s figures will be seen as a surprising but positive development. While it’s unlikely the Bank of England will respond immediately and cut rates tomorrow, steady progress towards the target of 2% inflation could create the space for rate cuts later in the year.”
Just Mortgages and Spicerhaart CEO Phillips said inflation remains stubborn but reiterated that the news is positive overall for the housing market. He explained:
“Inflation holding steady will have certainly caught many by surprise, as the general consensus was we would see inflation reach double the Bank of England’s target. While this is unexpected and certainly positive news, I still don’t think I’d be planning a rate cutting party for tomorrow. But what it could mean is far better odds for a change in November which had recently seemed off the cards.
“Despite the economy flatlining in July, inflation is still proving particularly stubborn, along with pretty fierce headwinds caused by both global and domestic pressures. As a result, managing inflation still wins the Bank of England’s tug of war instead of stimulating the economy – for now at least.
“Nonetheless, we have seen a good start to September with positive activity across all areas of our business – whether that’s buyer registrations, valuation requests or mortgage appointments. It shows that despite the pressures households are facing, there is still appetite to push on with plans to buy or sell.”
Ben Thompson, deputy CEO of the Mortgage Advice Bureau, believes inflation may be nearing its peak and said potential buyers have an increasing number of options. He added:
“While inflation holding means we’re still some way from the 2% target, it suggests that the bumpy ride may be leveling out. It’s widely believed that we’re nearing the peak, and this result supports the idea that a gradual decline is on the horizon.
“We know that these rising costs can make saving feel impossible. Our latest research confirms this, showing that 56% of renters see saving for a deposit as the biggest hurdle to homeownership. The good news is the days of needing a massive deposit are behind us. Thanks to increased borrowing power and the greater range of innovative products available, now is an excellent time to explore your options.”
See the ONS report in full at https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/consumerpriceinflation/august2025
