UK Inflation Rate Falls to 3-Month Low of 2.4%

Annual inflation rate in the United Kingdom eased to 2.4 percent in September of 2018 from 2.7 percent in August, below market expectations of 2.6 percent. It is the lowest reading in three months, mainly due to a slowdown in cost of food, transport and recreation and culture and a fall in clothing prices. Still, it remains above the BoE's target of 2 percent.

Year-on-year, prices rose at a slower pace for transport (5.6 percent vs 6.1 percent in August), namely transportation services (4.2 percent vs 6.4 percent); recreation and culture (3 percent vs 3.6 percent); food and non-alcoholic beverages (1.5 percent vs 2.5 percent); and furniture, household equipment and maintenance (0.5 percent vs 0.7 percent). Also, prices declined for clothing and footwear (-0.4 percent vs 0.3 percent) and miscellaneous goods and services (-0.3 percent vs -0.7 percent). On the other hand, inflation went up for housing, water, electricity, gas and other fuels (2.7 percent vs 2.3 percent), namely electricity (9.3 percent vs 7.4 percent) and gas (5.5 percent vs 4.3 percent) and was steady for restaurants and hotels (at 2.5 percent).

The consumer prices index including owner occupiers’ housing costs (CPIH) rose by 2.2 percent in September, below 2.4 percent in the previous month.

The annual core inflation rate, which excludes prices of energy, food, alcohol and tobacco, fell to 1.9 percent from a four-month high of 2.1 percent in August.

On a monthly basis, consumer prices edged up 0.1 percent, well below 0.7 percent in August and market expectations of 0.2 percent. Prices fell for transport (-1.8 percent) and food and non-alcoholic beverages (-0.2 percent) but rose sharply for clothing and footwear (3.1 percent) and education (1 percent). 

UK Inflation Rate Falls to 3-Month Low of 2.4%

ONS | Joana Taborda |
10/17/2018 8:57:13 AM