UK Inflation Cooled in September
October 17 2018 - 5:06AM
Dow Jones News
By Jason Douglas
LONDON--Annual inflation in the U.K. cooled in September but
nevertheless remained above the Bank of England's 2% annual goal,
keeping alive the prospect of gentle interest rate increases in the
next couple of years.
Consumer price growth slowed to an annual 2.4% in September from
2.7% a month earlier, the Office for National Statistics said
Wednesday. The slowdown was driven by an on-month decline in prices
for food and airfares, the agency said.
Inflation is stirring across the developed world as the global
economy enjoys a spell of strong growth, prompting major central
banks to gradually tip-toe back from the easy-money policies they
have pursued for more than a decade.
British consumers have been grappling with high inflation since
early 2017, after a 2016 vote to leave the European Union hit the
value of the pound, pushing up the price of imports.
Consumer-price inflation has now been running in excess of the
BOE's 2% target for 20 months and the central bank has telegraphed
that it expects to nudge up borrowing costs two or more times in
the next two years to steer inflation back to target.
Signs of inflationary pressures persist despite the slowdown in
headline inflation last month. Wage growth picked up to its fastest
annual pace in almost 10 years in the three months through August,
while Wednesday's data showed companies' raw-material costs
accelerated by more than 10% on year in September due to rising oil
prices.
Prices charged by companies at factory gate also rose. Output
prices were 3.1% higher last month than a year earlier, which
compares with an annual rise of 2.9% in August, the ONS said. The
pickup was driven in part by a heatwave in the U.K., which pushed
up prices for wheat and animal feed.
Write to Jason Douglas at jason.douglas@wsj.com
(END) Dow Jones Newswires
October 17, 2018 04:51 ET (08:51 GMT)
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