The UK Office for National Statistics (ONS) reported that for August 2021, the UK Consumer Price Index including owner-occupiers' housing costs (CPIH) rose by 3.0% compared to August 2020. This was up from the 2.1% year-over-year increase recorded in July. The increase of 0.9 percentage points from July to August is the largest increase recorded since the annual inflation series began in January 2006.

The increase in annual inflation rate mostly reflect base year effects, specifically lower restaurant and cafe prices in August 2020 resulting from the UK government's Eat Out to Help Out programme, and reductions in the Value Added Tax (VAT) in some sectors.

The main upward contributor to the change in the 12-month inflation rate was higher transportation costs, higher restaurants and hotel costs, and higher housing and household services.

Year-over-year growth in the Consumer Price Index excluding owner occupiers' housing costs (CPI) was 3.2%. This was up from 2.0% increase recorded in July. 

The UK inflation rate has declined in recent years, from a period in 2017 when it was over 2.5% to around 1.5% at the end of 2019. In 2020, inflation in the UK fell further, but to a lesser extent than the decline for inflation in Canada. In recent months inflation in the UK has been lower than inflation in Canada. 

Sources: United Kingdom Office for National Statistics Statistical bulletin, Annual growth - CPI, Annual growth - CPIH

Statistics Canada.  Table  18-10-0004-01   Consumer Price Index, monthly, not seasonally adjusted