On a monthly basis, inflation rose by 0.6% after a -0.1% reading in July.
The bigger-than-expected rise in inflation comes ahead of the Bank of England's next announcement on interest rates, which is due on Thursday.
It stated that Consumer Food Price Index (CFPI) stood at 1.52% in August 2017 as against 5.91% in the same month of previous year.
Inflation rose in both Britain and the EU overall, with increasing global commodity prices thought to be partly responsible, although the United Kingdom rate is higher than in all the larger western European nations.
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.
The consumer price index including owner occupiers' housing costs 12-month inflation rate was 2.7 percent in August, up from 2.6 percent in July. "Rates are a racing certainty to be left on hold at this week's meeting [on Thursday], but as ever the minutes will be closely scrutinised for clues as to committee members' latest thoughts".
Meanwhile the U.S. dollar may slip later this afternoon with the release of the latest JOLTs job data, with an expected dip in job openings in July likely to weigh on market sentiment. With the rate of inflation rising sharply, investors are likely anticipating the UK's first interest rate hike in a decade, could come sooner than expected. "Depreciation may have influenced this but increasing global commodity prices could also be a factor in the rise in inflation in the United Kingdom and the European Union overall". That means real-time earnings continue to decline, as the cost of living rises more quickly than earnings.