The inflation rate fell to 6.7% in August, down from 6.8% in July, according to figures from the Office for National Statistics.
Economists had expected the figure to increase, as fuel prices rose by 5p a litre in a month, but prices for food, hotel rates and air fares dropped, offsetting the increase.
David Bharier, Head of Research at the British Chambers of Commerce, said: “The CPI rate of 6.7%, while proving stubborn, shows that inflation is continuing to gradually ease off. Producer price inflation (PPI) fell by 2.3%. This should give the Bank of England pause for thought with the interest rate decision tomorrow.
“Inflation remains the top concern for businesses across our surveys, and firms will be concerned that fuel prices are the largest contributor to the CPI rate today. But the rising interest rate has also been a growing problem for many over the last year.
“Recent research by the BCC’s Insight Unit found that 46% of companies said current interest rates are having a negative impact, as costs for borrowing and mortgages go up. Smaller firms and those in the consumer facing sector are disproportionately impacted.
“The BCC’s latest economic forecast expects growth for the next two years will remain subdued. Businesses will now be worried that any further rises in the interest rate could could diminish consumer demand and make investment even harder.”