UK inflation remained unchanged in August, as price moves of various items cancelled each other out in the last major set of data to be published ahead of the Bank of England meeting.
The consumer price index was up 3.8% last month compared to a year ago, the same as July, the Office for National Statistics revealed, which was as economists predicted. As such, it remains well above the BoE's 2% target.
Month-on-month, UK CPI was up 0.3%, stepping up from the 0.1% rise in July.
Falling airfares were the main downward driver this month, the ONS said, with prices rising less than a year ago following the large increase in July linked to the timing of the summer holidays.
This was counterbalanced by a rise in prices of petrol and the cost of hotel bookings falling less than this time last year.
Food price inflation climbed for the fifth month in a row, hitting a 20-month high of 5.1%, with increases seen across vegetables, cheese and fish.
Core CPI, which excludes the volatile prices for fuel and food, eased to 3.6% in August, from 3.8% in July, as forecast.
Services CPI, which the BoE is tracking closely as a measure of how 'sticky' inflation is, also softened, to 4.7% from 5.0%.
Thomas Pugh, economist at RSM, said inflation was in line with the BoE forecast for August and that a slightly bigger-than-expected fall in services inflation would be seen as good news to the bank's monetary policy committee.
However, the drop in services inflation was largely due to the reversal of the jump in airfares in July, so the BoE prediction that inflation will still climb to 4% in September should still hold, which will make it "difficult, although not impossible, for the MPC to cut rates again this year."
He said food price inflation will probably continue to increase to a peak of between 5.5% and 6% later this year, with the increased prices reflecting rising global agricultural prices and "evidence that retailers are passing through higher employment costs, increasing prices by even more".
On the other side, airfare inflation plunged from 15.5% in July to -3.5% in August, showing how much airlines ramped up prices at the start of the school holidays.
"The bigger picture is that inflation will still probably hit 4%, or even a little higher, in September."
The MPC meeting on Thursday is widely expected to result in no change to the current 4% base borrowing rate.
September is forecast by the bank and many economists to be the likely peak for CPI inflation.
"After that, the headline rate is expected to drift downwards gradually," said Matt Swannell, chief economic advisor to the EY Item Club, adding that upward pressures on food prices "should start to fade around the turn of the year".
He said he thinks "the committee still favours further eventual rate cuts".
ING economist James Smith said he does not think that rate cuts are over this year, seeing a narrow chance that the November MPC meeting could bring the next one, if services inflation falls in September on the back of significant easing in rents.
Based on predictions that services inflation should ease more sharply by next spring, with wage growth easing below 4% by year-end and the late-November Budget to be dominated by tax rises, "we think there’s still a decent case for UK interest rates to fall two or three more times by next summer", he said.