"This is as low as the inflation data is going to go. This is the best chance we had to hit the 2 percent inflation target, and we failed"
- Alan Clarke, economist at Scotiabank
Consumer price inflation in the U.K. fell to its lowest level in almost three years last month, as electricity and gas prices rose. According to the U.K. Office for National Statistics, the U.K. inflation rate decelerated to a seasonally adjusted 2.2% in September, down from 2.5% in the previous month, in line with analysts' forecast. The Bank of England is expected to expand its stimulus program next month, as the inflation rate remains above central bank's 2 per cent target.
"This is as low as the inflation data is going to go. This is the best chance we had to hit the 2 percent inflation target, and we failed," said Alan Clarke, economist at Scotiabank.
"There is still some room for further policy easing but the stickiness of inflation in the face of such a large activity shock to the economy is a reminder to policy makers that this scope is not unlimited," said David Tinsley, an economist at BNP Paribas SA in London. They "will need to revise up their short-term outlook for inflation."
The FTSE 100 Index rose 1.12 per cent to 5,870.54. The broader FTSE All-Share Index added 1.11 per cent to 3,065.15.
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