Inflation to Hit 2% in 2017

Savers and investors should prepare for a steeper rate of inflation, say economists as CPI figures revealed today show price rise of 1%

Emma Wall 18 October, 2016 | 4:08PM
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UK inflation has hit a near two-year high thanks to higher clothing costs as well as increased pricing in restaurants and hotels. There was a slight uplift in household bills too. Inflation rose to 1% last month from 0.6% in August, the Office for National Statistics said today. The rate is the highest since November 2014, when it was also 1%.

Inflation was expected to climb to 0.9%. Nonetheless, inflation continues to remain below the 2% Government target. Core inflation that excludes energy, food, alcoholic beverages and tobacco products increased to 1.5% from 1.3%.

The ONS said that recent weakness in the value of sterling caused by the vote to leave the European Union had no effect on the CPI measure of inflation, but it had influenced producer prices.

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Emma Wall  is former Senior International Editor for Morningstar