UK inflation rises to 3.5 per cent as fuel prices climb
UK consumer inflation accelerated to 3.5 per cent in September from 3.1 per cent in August. Motor fuels supplied the largest upward contribution, while services and core inflation also increased. Prices rose 0.4 per cent during the month. Restaurants and hotels partly offset the acceleration in the annual rate.
Economics & Markets··Evening
Annual inflation accelerates from August
UK consumer prices rose 3.5 per cent in the year to September, up from 3.1 per cent in August. The Office for National Statistics, the national statistical agency, measured a monthly increase of 0.4 per cent. Prices had changed little in the same month a year earlier. Higher motor fuel prices made the largest upward contribution to the change in annual inflation.[1], [2]
The broader Consumer Prices Index including owner occupiers’ housing costs also accelerated. Its annual rate rose from 3.3 per cent to 3.6 per cent, while its monthly increase was 0.4 per cent. Owner occupiers’ housing costs increased 4 per cent over the year and accounted for approximately 18 per cent of this broader measure.[1]
Motor fuels lift the annual transport rate
Motor fuel prices stood 29.8 per cent above a year earlier, compared with an annual increase of 23 per cent in August. Between August and September, average petrol prices rose 8.2 pence per litre to 169.5 pence. Diesel increased 10.7 pence per litre to 192.5 pence. The sharper annual fuel increase contributed to transport inflation rising from 4.6 per cent to 6.6 per cent.[1]
Transport prices nevertheless declined 0.4 per cent during September itself. In the corresponding month a year earlier, they had fallen by a larger 2.3 per cent. The smaller monthly decline therefore accompanied a higher annual rate. Restaurants and hotels supplied the largest downward contribution partly offsetting the acceleration across the consumer price basket.[1]
Services and core prices also rise faster
Core consumer inflation, excluding energy, food, alcohol and tobacco, rose from 2.6 per cent to 2.8 per cent. Annual services inflation increased from 3.4 per cent to 3.7 per cent, while goods inflation rose from 2.7 per cent to 3.2 per cent. Food and non-alcoholic beverage inflation remained at 1.3 per cent, with prices in that category falling 0.2 per cent during the month.[1]
Recreation and culture inflation increased from 1.6 per cent to 2.3 per cent annually. Live music prices rose 0.9 per cent during the month, against an 8.6 per cent fall in the corresponding period a year earlier. Computer game downloads increased 40 per cent monthly, compared with a previous increase of 16.1 per cent.[1]
