UK inflation slows more than expected on food, transport | Fin24
 
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UK inflation slows more than expected on food, transport

Oct 17 2018 11:07
Lucy Meakin, Bloomberg

UK inflation slowed more than expected in September, dragged lower by the cost of food and transport fares.

Consumer-price growth dipped to 2.4% from 2.7% in August, the Office for National Statistics said on Wednesday. The rate was lower than the median 2.6% forecast in a Bloomberg survey.

Downward pressure came mainly from food, which fell 0.2% compared with a 0.8% rise a year earlier. There was also pressure from ferry prices, clothing and recreation and culture such as theatre tickets and computer games.

These influences were partly offset by energy prices, with tariff hikes lifting electricity prices by 1.8% compared with no change a year earlier.

Core inflation, which excludes volatile food, energy, tobacco and alcoholic drinks, slowed to 1.9% in September.

Inflation averaged 2.5% in the third quarter, in line with Bank of England forecasts. Signs of domestic cost pressures prompted officials to raise interest rates in August, but no further moves are expected before there is clarity on Brexit.

The pound weakened after the data, falling 0.3% to $1.3139 as of 10:32.

Oil prices

Price growth is expected to drift down toward the 2% target, giving a real-terms boost to households now enjoying the fastest wage growth in almost a decade.

How quickly it gets there may depend on oil prices, with tensions with Saudi Arabia reviving speculation that Brent crude could soon reach $100 a barrel.

Producer input prices rose 1.3%, taking the annual rate of increase to percent 10.3. Output prices climbed an annual 3.1%.

House prices rose just 3.2% in the year through August, the weakest pace since 2013. The worst-performing region was London, where values fell 0.2%.

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uk  |  inflation  |  economy
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