U.K. inflation was reported to have slowed in August due to falling fuel prices, although food prices continued to rise as the country's cost-of-living crisis continued.
The consumer price index rose 9.9% on an annualized basis last month from 10.1% recorded in July. The recorded figures also missed the expectations of economists who were targeting a 10.2% increase.
On a monthly basis, consumer prices rose 0.5%, slightly below forecasts. Core inflation, which excludes volatile energy, food, alcohol and tobacco, rose 0.8% month-on-month and 6.3% year-on-year, in line with expectations.
"Falling motor fuel prices were the factor that contributed to the largest decline in changes in both core CPI and CPI annual inflation rates between July and August 2022," the ONS said in its report.
Sterling was broadly unchanged against the US dollar after the report and started to strengthen by 0.75% to $1.1572.
UK has been hit by a nasty cost-of-living crisis this year as food and energy prices soared and wage rises failed to keep pace with inflation, leading to one of the sharpest falls.
Last week, new British Prime Minister Liz Truss announced an emergency fiscal package capping annual household energy bills at £2,500 ($2,881.90) for the next two years, with an equivalent guarantee for businesses over the next six months.
Analysts expect the measures to cost public spending an estimated £130 billion. This measure is believed to reduce inflation in the short term.
The Bank of England is set to announce its latest monetary policy decision next Thursday after a delay due to the death of Queen Elizabeth II, and is widely expected to opt for a sharp 75 basis point hike in interest rates as it looks to rein in inflation.
