The UK's annual inflation rate slowed to 6.7% in August amid weaker growth in food prices and falling hotel and air travel costs.

Last month's 0.1% drop in inflation from 6.8% in July marks the sixth consecutive decline in the headline rate. This does not mean that prices are falling, only that they are rising at a slower pace.

Economists had expected inflation to rise to around 7% due to rising petrol prices, which reached 155.5p per litre in August - the highest UK average since December last year.

In response to the surprise fall in inflation, investors have been slashing bets on whether the Bank of England's Monetary Policy Committee will pause its long run of interest rate hikes later today (21 September).

However, Chancellor of the Exchequer, Jeremy Hunt, said that further tightening of monetary policy may still be necessary:

"Today's news shows the plan to deal with inflation is working - plain and simple. But it is still too high which is why it is all the more important to stick to our plan to halve it so we can ease the pressure on families and businesses. It is also the only path to sustainably higher growth."

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