LONDON, Sept. 17 (Xinhua) -- British consumer price index (CPI), a main gauge of inflation, fell by 2.7 percent in August, down from 2.8 percent in the previous month, said the Office for National Statistics (ONS) on Tuesday, marking another step toward the target rate of two percent CPI set by the central bank.
The inflation rate drop was mainly driven by motor fuels, air transport and clothing prices, said the ONS.
Based on the ONS figures, prices of transport rose by 1.0 percent in August compared with July.
The ONS said petrol prices rose by 2.0 pence per litre this year, to stand at 1.37 pounds in August, compared with a rise of 3.5 pence per litre to 1.35 pounds last year, while diesel prices rose by 2.0 pence per litre this year compared with a rise of 3.3 pence a year ago.
Air fares rose by 9.4 percent between July and August this year, while the main downward effect came from domestic routes.
However, the largest upward contributions to the CPI were from furniture, household equipment and maintenance.
Prices of furniture, household equipment and maintenance increased by 1.8 percent in August compared with July, with the upward contribution coming principally from furniture and furnishings, and major appliances and small electric goods.
Samuel Tombs, an economist at Capital Economics, believed that Britain could reach the two percent CPI rate within the next six months.
"Past movements in commodity prices suggest that food inflation could drop to about 1 percent within the next six months, while the weakness of leading measures of core price pressures, such as producer output prices, suggest that core inflation has further to fall," said Tombs.
According to the ONS figures also released on Tuesday, Britain's producer prices figures dropped sharply in output price inflation from 2.1 percent to 1.6 percent in August.
"We continue to think that CPI inflation is likely to fall back to the 2 percent target within the next few months, a development that would help to ease the squeeze on households' real earnings and cool fears in the markets that one of the inflation knockouts to the MPC's (Monetary Policy Committee of the central bank) forward guidance is likely to be breeched," said Tombs.