The rate of inflation, as measured by the Consumer Prices Index (CPI), in the UK fell back to 0% in August, according to the Office for National Statistics (ONS).

The ONS said smaller rises in clothing prices was the biggest contributor to the fall. Inflation was at 0.1% in July.

Falling petrol prices and ferry fares also contributed to the decline. The ONS said rising prices of soft drinks, furniture and home furnishings helped to limit the fall to just one percentage point.

Inflation as measured by the Retail Prices Index (RPI) fell from 1.1% to 1.0%.

Andy Scott, economist at HiFX, said: “Consumer price inflation fell back to zero last month as lower energy costs continued to keep price growth a long way off the Bank of England’s 2% target rate. Today’s number is unlikely to change the market’s view that a UK rate hike is unlikely to happen in the next six to nine months, despite the Governor maintaining his signal of one around the turn of the year.

“Another signal for delays in a UK rate hike would be a net positive for corporates from a cost of debt servicing point of view, along with its effect on sentiment which will remain underpinned by supportive growth conditions."