UK inflation rose in October, official data from the Office of National Statistics has revealed. Inflation rose to 1.3% in October from 1.2% in September, only slightly ahead of expectations. The rate was forecast to remain unchanged at 1.2%.
The ONS said the marginal rise was due to transport costs falling by less than they did a year ago, highlighting air fares in particular.
Food and motor fuel prices, which have in the past pushed inflation higher, were a downward factor in October reducing it by 0.3 percentage points.
Core inflation which excludes energy, food, alcoholic beverages and tobacco, held steady at 1.5% in October.
There is some respite to come for consumers, as economists predict November’s inflation rate could be as low as 1% - half the official inflation target. Indeed last month the Bank of England admitted that inflation was likely to fall below 1% in the near future, meaning the Bank Governor Mark Carney will have to write a letter to Chancellor George Osborne explaining why.
Some economists expect it may be as soon as November’s inflation figure, announced next month.
“The recent Shop Price Index from the British Retail Consortium showed further falls in food prices, while anyone who has filled up a car, bought clothes or electronic goods in the past six weeks will know that there are some discounts out there,” said Jeremy Cook, chief economist at foreign exchange company World First.
Although consumers may welcome a slow in the rise of prices, lower inflation is no good for those trying to save. A lack of inflationary pressure on the Bank of England will mean that interest rates could stay low for some time.
“Given the exceptionally weak economic performance of the euro zone, and the absence of inflationary pressure, it is difficult to see why the Bank of England would consider raising interest rates at present. I expect them to remain on hold until late 2015 and perhaps beyond,” said Ben Brettell, senior economist for Hargreaves Lansdown.
