UK inflation: CPI remains stagnant at 6.7% due to high fuel prices despite hopes for a third consecutive dip
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Despite hopes that the UK could see another consecutive fall in inflation, the Office for National Statistics (ONS) announced today (18 October) that the inflation has remained at 6.7%.
The Consumer Price Index (CPI) inflation stayed at the same level at August, marking a halt to three consecutive months of the rate going down. Analysts had also hoped for a further waning of pressure on households to 6.6%, however while food and drink prices have eased, this has been offset by higher petrol and diesel prices for drivers. This has left CPI inflation stubbornly stagnant.
ONS chief economist Grant Fitzner said: “After last month’s fall, annual inflation was unchanged in September. Food and non-alcoholic drinks prices eased again across a range of items, with the cost of household appliances and air fares also falling this month. These were offset by rising prices for motor fuels and the cost of hotel stays.”
While the cost of food and drinks, particularly alcoholic drinks, are still much higher than consumers would have paid one year ago, the costs of these have not risen as rapidly in the past few months. The ONS said that the products which saw the biggest ease in inflationary pressure were milk, eggs and cheese. Furniture and household goods and appliances also saw inflationary pressure ease, impacting the overall inflation rate. The newest analysis comes after the ONS released figures this week showing that average wages were outpacing inflation for the first time in two years.
The ONS said that prices remain 10% higher than they were this time last year, with a jump of 3.6% against levels in August. This was due in part to supply restrictions in the Middle East putting pressure on oil prices.
The inflation rate of 6.7% remains well off of the Bank of England's target of 2%, with much work needed still to meet the government's target of halving inflation by the end of 2023. Treasury minister Andrew Griffith said the government is “on track” to meet this target.
Chancellor Jeremy Hunt said: “As we have seen across other G7 countries, inflation rarely falls in a straight line, but if we stick to our plan then we still expect it to keep falling this year.Today’s news just shows this is even more important so we can ease the pressure on families and businesses.”