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UK inflation has dipped slightly, but remains well over the Bank of England’s target.
The consumer prices index rose by 3.1% in the year to September, new figures from the Office for National Statistics this morning show.
Thats’s down from 3.2% in August, when inflation hit the highest rate in nine years.
But, that dip is mainly due to the impact of last summer’s Eat Out to Help Out scheme — as prices rose in September 2020 as the scheme wrapped up. So it’s probably only a temporary respite.
Many other prices have risen over the last year, as the cost of living squeeze has hit households.
As this chart shows, transport, food, and household goods and services all pushed up inflation over the last year.
Mike Hardie, head of prices at the ONS, explains:
“Annual inflation fell back a little in September due to the unwinding effect of last year’s ‘Eat Out to Help Out,’ which was a factor in pushing up the rate in August.
“However, this was partially offset by most other categories, including price rises for furniture and household goods and food prices falling more slowly than this time last year.
In September alone, prices rose by 0.3%, driven by price rises in clothing and footwear, housing and household services, recreation and culture, and furniture and household goods.
That follows August’s record jump in inflation from 2% to 3.2%, as the cost of living accelerated ahead of the Bank of England’s 2% target.
The Bank expects inflation to rise over 4% by early next year. And yesterday, MPs were warned that prices are rising at “terrifying” speed in the hospitality sector, with inflation running as high as 18%.
Ian Wright, chief executive of industry body the Food and Drink Federation, told MPs on the business, energy and industrial strategy committee:
“Inflation is a bigger scourge than almost anything else because it discriminates against the poor.”
More details and reaction to follow…
- 7am BST: UK consumer price inflation for September
- 7am BST: UK producer prices report for September
- 9.30am BST: UK house price index for August
- 10am BST: Eurozone inflation report for August (final estimate)
- 3.30pm BST: EIA weekly US oil inventory figures