United Kingdom: Inflation decreases in September
Consumer prices increased 0.29% in September over the previous month, coming in below August’s 0.71% increase. The result was primarily due to a softer rise in prices for recreation and culture. In addition, price pressures for transportation and restaurants and hotels dropped.
Inflation came in at 3.1% in September, which was down from August’s 3.2% and slightly below market expectations. However, inflation was still well above the Bank of England’s 2.0% target. Annual average inflation rose to 1.5% in September (August: 1.3%). Lastly, core inflation fell to 2.9% in September, from August’s 3.1%.
Inflation is set to trend higher in the coming months, as the energy price cap was lifted from October in response to higher wholesale gas prices, with a further notable increase in the cap likely in April 2022.