United Kingdom Inflation September 2016

United Kingdom

United Kingdom: Inflation jumps in September

October 18, 2016

In September, consumer prices increased 0.2% from the previous month, which came in below the 0.3% increase seen in the previous month. August’s figure had marked the highest reading in five months. The increase in September reflected higher prices for clothing, overnight hotel stays and motor fuels.

Inflation was 1.0% in September, which was up from August’s 0.6% and marked the highest reading since October 2014. The reading came in above the 0.9% expected by the markets. Finally, annual average inflation inched up from 0.3% in August to 0.4% in September, the highest figure in over a year.

In August, the Bank of England cut its Base Rate for the first time since March 2009 in order to safeguard the economy and offset some of the negative effects of the Brexit vote. The move will also put upward pressure on inflation. The BoE sees inflation averaging 1.3% in Q4 2016 and 2.1% in Q4 2017. FocusEconomics Consensus Forecast panelists expect inflation to average 0.7% in 2016, which is down 0.1 percentage points from last month’s forecast. For 2017, the panel forecasts that inflation will average 2.2%.

Author:, Senior Economist

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United Kingdom Inflation Chart

United Kingdom Inflation September 2016

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

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