- Richard Campbell, ONS statistician
The UK inflation unexpectedly slipped back into negative territory in September for the second time this year, reaching the lowest level on records. According to the Office for National Statistics, consumer price inflation declined to an annual rate of –0.1%, as cheaper fuel and clothing pushed down average prices. Economists, however, had expected costs of living to hold unchanged at zero. The official report showed petrol prices dropped 14% between August and September compared with the same period last year. Food prices also continued to decline by 2.5% over the twelve months through September. The UK annual inflation has stuck in a narrow band of –0.1% to +0.1% since February, boosting consumers' spending power as earnings began to grow more robustly, boding well for economic expansion. In its October outlook, the Bank of England said consumer inflation was predicted to remain below 1% until next spring, longer than was estimated in its August Inflation Report forecasts.
The ONS also released data for August house price inflation, which showed a 5.2% annual increase across the country, unchanged from July.
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