BULLET: UK Data: Aug CPI Upside Surprise on Higher Transport.>

UK Data: Aug CPI Upside Surprise on Higher Recreation, Transport Prices   

--UK Aug CPI +0.7% m/m; +2.7% y/y vs +2.5% Jul

--UK Aug Core CPI +0.8% m/m; +2.1% y/y vs +1.9% Jul 

--UK Jul House Prices +3.1% y/y vs +3.2% y/y Jun; London prices -0.7%y/y 

------------------------------------------------------------------------

CPI inflation rose by a six-month high of 2.7% in August, courtesy 

of increases across a range of basket categories. That meant inflation 

comfortably beat analysts' expectations of 2.4%, constituting an upside 

surprise MNI  previously highlighted. Recreation and Culture provided 

the largest contribution to the annual change in inflation (+0.07pp), 

with theatre tickets and PC games the biggest drivers, according to the 

ONS. Elsewhere upward pressure was provided by transport (+0.06pp), with 

sea and air fares higher than normal for this time of year, and new 

season Autumn clothing. Core inflation picked up to 2.1%, while house 

price growth fell to 3.1% - the lowest annual rate since August 2013.