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18/10/2023 13:11

UK inflation rate holds at 6.7% in September

Official data released on Wednesday revealed that the British annual Consumer Price Inflation (CPI) remained steady at 6.7% in September, maintaining the 18-month low set in August. This defied expectations from economists polled by Reuters, who foresaw a slight dip to 6.6%. Anticipations from financial markets suggest that the Bank of England will maintain interest rates at 5.25% on November 2, following their decision to keep rates unchanged in September, influenced by an unexpected decline in the August inflation rate.

In October 2022, British consumer price inflation reached an unprecedented 11.1%, the highest in 41 years, attributed to surging European energy prices following Russia's invasion of Ukraine. This surge added to existing challenges from supply chain disruptions and labor shortages resulting from the COVID-19 pandemic. The Bank of England's August forecasts indicated that inflation would likely persist above its 2% target until early 2025.

The data from Wednesday further demonstrated that core inflation, excluding volatile categories like food, energy, alcohol, and tobacco prices—a metric often considered a better indicator of underlying price trends—fell slightly to 6.1% in September from August's 6.2%. Economists had predicted a decrease to 6.0%.