UK inflation rises to 1% in September

UK inflation

UK inflation

Rising prices for clothes, hotel rooms and petrol have led to the highest rate of inflation in nearly two years, official figures show.

Inflation rose to 1.0% in September, up from 0.6% in August, the Office for National Statistics (ONS) said.

Clothing saw its biggest price rise since 2010 and fuel, which was falling a year ago, was also more expensive.

However, the ONS said there was “no explicit evidence” the lower pound was the reason for rising prices.

The jump in the Consumer Prices Index (CPI) from 0.6% to 1.0% was the biggest month-on-month increase since June 2014.

The 1% rate is the highest since November 2014. However, ONS head of inflation Mike Prestwood said it was “low by historic standards”.

CPI measures the price of a “shopping basket” of more than 700 items, from the cost of women’s leggings to a multipack of fizzy drinks.

Economists have predicted that prices will rise further, particularly as and when the fall in the pound makes food and clothing more expensive.

Ben Brettell, senior economist at Hargreaves Lansdown, said: “This will undoubtedly be tough on those with low incomes, and it’s also not good news for savers who are losing money in real terms.”

Sterling has dropped nearly 20% against the dollar since the Brexit vote, including a 5% fall this month after Theresa May set a timeline for the UK’s withdrawal from the EU.

Howard Archer, chief economist at IHS Global Insight, said: “Even before the pound has sunk to new lows in October, it is notable that price pressures were building up down the supply chain.

“In particular, producer output prices rose 1.2% year-on-year in September, which was the largest gain for three years and up from 0.9% in August.”

Kathleen Brooks, research director at City Index, said: “Oil imports are getting more expensive, clothing imports are also costing more, and the weak pound is boosting the tourism industry, which appears to already be fuelling a rise in hotel prices.”

Others said these pressures left the UK on course to exceed the Bank of England’s target of a 2% inflation rate.


You Might Also Like

No Comments

Leave a Reply