UK Inflation Rate Rises to Nearly 2-Year High in September


British consumer prices rose 1% in the year to September 2016, following 0.6% growth in August and above market expectations of 0.9% gain. It was the highest inflation rate since November 2014 boosted by higher cost of clothing, motor fuels and hotels amid a weaker pound.

Main upward pressure came from: Clothing and footwear (+1 percent from -1.2 percent in August); restaurants and hotels (+2.9 percent from +2.3 percent) boosted by higher prices of accomodation services (+5 percent from +2.3 percent); and transportation (+1.2 percent from +1 percent in August) boosted by motor fuels (+1.4 percent from -2.6 percent). Additional gains came from: recreation and culture (+0.8 percent from +0.7 percent); housing and utilities (+0.2 percent from -0.1 percent); and miscellaneous goods and services (+1.3 percent from +0.8 percent).

By contrast, prices decreased for: food and non-alcoholic beverages (-2.3 percent from -2.2 percent the previous month); and furniture, household equipment and maintenance (-1.4 percent from -1 percent).

On a monthly basis, consumer prices rose 0.2 percent, following a 0.3 percent gain in August and beating market expectations of a 0.1 percent growth.

The core index which excludes prices of energy, food, alcohol and tobacco advanced 1.5 percent on the year, the highest since March.

ONS | Joana Ferreira | joana.ferreira@tradingeconomics.com
10/18/2016 11:28:22 AM