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The rate of inflation crept down slightly to an annual rate of 3.1% in September, according to official figures which are tipped to surge ahead in the months ahead and force the Bank of England to intervene.
The Office for National Statistics (ONS) said that rises in the cost of fuel last month, reflecting the impact of the delivery difficulties that sparked panic-buying, and wider increases across the economy were offset by falling restaurant and hotel costs as the effects of last year’s Eat Out to Help Out scheme fell away.
Economists had predicted the Consumer Prices Index (CPI) measure would remain at 3.2%.
But they warn that October’s figure is set to shoot up – driven by the 12% leap in the energy price cap at the beginning of this month and wider increases in the cost of goods and services linked to the COVID global supply chain disruption and worker shortages – the latter made worse by the government’s post-Brexit immigration rules.
The British Chambers of Commerce declared that the dip in the CPI figure reflected “temporary data distortions rather than the reality on the ground.”
The predictions of a dramatic upwards shift for living costs as price rises are passed on has already prompted a change of tune among rate-setters at the Bank of England.
While most who have spoken out still see the price picture as transitory – a consequence of economies getting back in gear following pandemic lockdowns – there is now a clear admission at the top that inflation will prove more sticky than originally thought.
Bank governor Andrew Bailey gave his strongest hint yet, at the weekend, that Bank rate was to rise from its crisis low of 0.1%, with the markets seeing a 90% chance of a token increase next month.
He told a panel…
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Source : skynews
