The gain came after the biggest rise in clothes and footwear prices in nearly three decades, which surged 2.4% on the month and 4.6% compared with a year earlier.
According to the Office for National Statistics (ONS), clothing prices rose faster than a year ago, which coupled with a hike in the cost of petrol, pushed inflation higher.
Sterling jumped more than half a percent against both the dollar and euro on Tuesday after United Kingdom inflation rose to its highest in five years, adding to the case for the Bank of England to do more to support the pound.
LONDON-Annual inflation in the United Kingdom accelerated in August, a pickup likely to reinforce the Bank of England's view that interest rates may soon need to rise despite modest growth.
"We have seen a lot of stops taken out at the $1.3230 level".
But a rebound in the price of oil also had an impact, pushing up fuel prices.
The ONS said the all-items Consumer Prices Index (CPI), climbed 2.9% on the year in August, up from July's 2.6%.
However markets are likely to be more focused on the accompanying wage data as economists forecast that average earnings will have risen from 2.1% to 2.3% over the same period, alleviating some of the pressures of soaring inflation on United Kingdom consumers.
There was upward pressure on clothing and fuel prices for the month and there was wider upward pressure on finished goods prices for the month. Yet it looks likely that inflation will fall back in the coming months as the effect of Brexit-induced sterling weakness fall out of the year-on-year calculation'.
"Indeed it's possible that 2.9% will be the highest we see in the current cycle". Mark Carney will certainly be hoping so, as it will save him the trouble of writing to the Chancellor to explain himself.
Currie noted that fleeting inflation and tepid economic growth means the Bank of England is unlikely to turn off the taps of monetary stimulus too quickly.
"With the Bank of England meeting this week the hawks may well be emboldened by today's price growth, but with the pay squeeze entrenching itself more deeply month by month the policy hawks (wanting a rate hike) will find their room for manoeuvre sorely limited", said Chris Beauchamp, chief market analyst at IG trading group, said following Tuesday's data.
"Over the long term, inflation is rarely a country-specific phenomenon, especially for developed, open, market economies".