United Kingdom Inflation September 2021

United Kingdom

United Kingdom: Inflation decreases in September

October 20, 2021

Consumer prices increased 0.29% in September over the previous month, coming in below August's 0.71% increase. The result was primarily due to a softer rise in prices for recreation and culture. In addition, price pressures for transportation and restaurants and hotels dropped.

Inflation came in at 3.1% in September, which was down from August’s 3.2% and slightly below market expectations. However, inflation was still well above the Bank of England’s 2.0% target. Annual average inflation rose to 1.5% in September (August: 1.3%). Lastly, core inflation fell to 2.9% in September, from August’s 3.1%.

Inflation is set to trend higher in the coming months, as the energy price cap was lifted from October in response to higher wholesale gas prices, with a further notable increase in the cap likely in April 2022.

FocusEconomics Consensus Forecast panelists expect inflation to average 2.1% in 2021, up 0.1 percentage points from last month’s forecast, and 2.6% in 2022, which is up 0.3 percentage points from last month’s prediction.


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United Kingdom Inflation September 2021

Note: Annual and monthly variation of consumer price index in %.
Source: Office for National Statistics (ONS) and FocusEconomics calculations.


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