- Richard Campbell, head of CPI at Office for National Statistics
Consumer price inflation in the UK remained in negative territory for the second month in a row in October, highlighting worries over deflationary pressures and views that interest rates would stay at record-lows in the nearest future, the Office for National Statistics reported. This was primarily driven by declining transport and food prices that had negatively impacted the inflation rate, which is well below the BoE's target of 2%. Consumer prices declined 0.1% compared with a year ago, the same as in September and in line with analysts' projections. This is the first time this year that inflation rate was below zero for two successive months. In monthly terms, consumer prices climbed 0.1%, also matching expectations. Core inflation, which excludes food, energy, alcoholic beverages and tobacco, stepped up 1.1% in October from September's 1%. At the same time, input cost inflation slowed down in October to 0.2% from 0.5% in the preceding month, mainly due to a decline in import prices. The retail price index rose 0.7% in October, below the forecasted 0.9% and down from September's 0.8%. With regards to the house price index, it gained 6.1% in the ninth month of the year, above market estimates of a 5.4% rise and following August's increase of 5.5%. The most recent rate of increase in house prices was the fastest one since March, when a 9.6% growth was recorded.
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