Latest official inflation figures (subscription required), published to XpertHR today, show that retail prices index (RPI) inflation was 4.8% in August 2008, down from 5.0% in July. Consumer prices index (CPI), however, rose from 4.4% in July to 4.7% in August - some 2.7 percentage points above the government target rate of 2%.

The IRS headline pay award is now 1.3 percentage points below the level of RPI, at 3.5%, according to our latest analysis (subscription required), based on pay settlements concluded over the three months to 31 July 2008.

These ongoing high rates of inflation were by no means unexpected. King indicated in a speech last week that inflation would continue on its upward course in the near term. In King's estimation:

In the UK, we face a difficult but temporary period during which inflation will remain high for a while but output growth, at best, weak.

See our latest inflation forecasts (subscription required), for more on the future course of RPI.

Update: King's letter to the Chancellor (PDF format, 1.24MB) was published at 10.30 today, one hour after the inflation figures.

• If you are actively involved in your organisation's pay-setting process, we would like to invite you to take part in the 20th annual IRS Pay and Benefits Bulletin Pay Prospects survey of UK private sector reward practices. Each year, this major study looks in detail at how private sector employers set their annual pay review and reward priorities for the coming year. Taking part in our research allows you to compare your expected pay award and reward practices with those of other organisations. The closing date is Thursday 18 September 2008.