Inflation holds at 2.7pc

Robyn Hall

October 15, 2013

The largest upward contribution came from air fares though this was offset by a downward contribution from petrol and diesel prices.

Samuel Tombs, UK Economist at Capital Economics, said: “September’s UK consumer prices figures are not a significant blow to hopes that inflation is on course for a low rate.

“In contrast to expectations of a fall CPI inflation held steady at 2.7% and core inflation rose from 2% to 2.2%.”

Tombs said the rise in core inflation is unlikely to mark the start of an upward trend.

He added: “Airfares inflation is often volatile from month to month. And note that price pressures at the start of the pipeline remain weak – today’s producer prices figures revealed that output price inflation fell from 1.7% in August to 1.2%.

“So despite the recently announced utility price hikes we continue to think that CPI inflation is likely to fall back to the 2% target within the next few months and will remain low thereafter.”

CPIH, the index which takes into account owner occupier housing costs, grew by 2.5% in the year to September 2013, unchanged from August.

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