UK Inflation Remains Steady At 3%
(RTTNews) - UK inflation held steady at the strongest level in more than five years in October as higher cost of food was offset by cheaper motor fuel prices.
Consumer prices climbed 3 percent year-on-year in October, the same pace as seen in September, the Office for National Statistics reported Tuesday. Inflation was expected to accelerate to 3.2 percent.
The 3 percent inflation was the highest figure since March 2012.
In its latest Inflation Report, the Bank of England had projected inflation to peak at 3.2 percent in October, before starting to fall back.
As the inflation remained at 3 percent, Bank of England Governor Mark Carney was spared from writing a letter to the Chancellor explaining the reasons why inflation exceeded the 2 percent target by one percentage point.
Inflation figures does not alter the assessment that policymakers will pause for the time being before raising interest rates again in the second quarter of 2018, Ruth Gregory, an economist at Capital Economics, said.
Month-on-month, consumer prices edged up 0.1 percent versus the expected growth of 0.2 percent.
Core inflation that excludes energy, food, alcoholic beverages and tobacco, also held steady at 2.7 percent in October.
Likewise, the consumer price index including owner occupiers' housing costs, CPIH advanced 2.8 percent annually in October, unchanged from the September rate.
Food and non-alcoholic beverages prices advanced 4.1 percent in October, the highest level since September 2013. The upward contributions were offset by falling motor fuel and furniture prices.
Another report from the ONS showed that output price inflation slowed to the lowest in almost a year in November.
Output prices grew 2.8 percent year-on-year in October, the weakest since last November, versus 3.3 percent in September. The expected rate was 2.9 percent.
On a monthly basis, output prices gained 0.2 percent, the same rate as posted a month ago.
At the same time, input price inflation eased notably to 4.6 percent in October from 8.1 percent in September. Inflation was forecast to slow to 4.8 percent.
Driven by crude oil, input prices climbed 1 percent in October from September, when they rose 0.2 percent.