Inflation drops to 1.5% in August

Drop means inflation now matches matches four-and-a-half-year low seen in May

Retail Operations Inside A Tesco Extra Supermarket

Inflation slowed from 1.6% to 1.5% last month as consumers benefited from lower petrol prices and the ongoing supermarket price war.

The figure, which matches the four-and-a-half-year low seen in May, means CPI inflation has been below its target of 2% for eight months in a row - the longest such run since 2005.

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Falling petrol prices and lower food and non-alcoholic drinks provided the largest downward contributions to the 0.1% decline in the inflation rate, the Office for National Statistics (ONS) said.

The figure may ease pressure on Bank of England policy-makers as they consider when to hike interest rates which have been at the historic low of 0.5% for more than five years.

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