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The Consumer Price Index (CPI) inflation\u00a0rose by 6.7 percent in the 12 months to September 2023, unchanged from August, according to official figures.<\/p>\n
The Office of National Statistics (ONS) said the largest downward contributions to the monthly change in annual inflation rates came from food and non-alcoholic beverages, where prices rose by less in September 2023 than a year ago. However, these prices were\u00a0offset by higher petrol and diesel prices for motorists.<\/p>\n
Analysts had predicted\u00a0inflation\u00a0would dip to 6.6 percent for the month. According to ONS, the identical annual rate between August and September 2023 was a result of prices rising by 0.5 percent on the month compared with a rise of 0.4 percent a year earlier.<\/p>\n
Commenting on today\u2019s inflation figures, ONS Chief Economist Grant Fitzner said: “After last month’s fall, annual inflation was unchanged in September.<\/p>\n
“Food and non-alcoholic drink prices eased again across a range of items with the cost of household appliances and airfares also falling this month.\u00a0These were offset by rising prices for motor fuels and the cost of hotel stays.”<\/p>\n
READ MORE: <\/strong> Wages outstrip inflation for first time in two years, rising by 7.8%<\/strong><\/p>\n This reading will be important in calculating how much benefits payments will increase next year, as well as outlining increases in some taxes, such as business rates.<\/p>\n Chancellor Jeremy Hunt said: “As we have seen across other G7 countries, inflation rarely falls in a straight line, but if we stick to our plan then we still expect it to keep falling this year. Today’s news just shows this is even more important so we can ease the pressure on families and businesses.”<\/p>\n Treasury minister Andrew Griffith insisted the Government was “on track” to hit its pledge to halve inflation this year despite the Consumer Price Index remaining flat in September.<\/p>\n Asked if he believed the rate would be lower, the economic secretary to the Treasury told Times Radio: “No, I expected it to be flat. At the beginning of the year, we set ourselves an ambitious target to halve inflation this year. Today’s figures – flat for September – show we are on track for that.”<\/p>\n Don’t miss… <\/strong> Marcus Brookes, chief investment officer at Quilter Investors, said: \u201cUK inflation\u2019s march back down to target can very much be described as \u2018slow and steady\u2019, with CPI refusing to budge in September at 6.7 percent.<\/p>\n \u201cClearly the UK is not winning any races with this trajectory as inflation still remains incredibly elevated and much more so than peers. With geopolitical tensions rising, energy and petrol prices are once again on the way up and inflationary pressures risk hitting an economy that has gone through a painful cost of living crisis. For now, the higher for longer interest rate narrative will continue to persist.\u201d<\/p>\n Core inflation, which reflects the change in prices of goods and services – excluding those from the food and energy sectors – has however slowed in pace.<\/p>\n According to the data published today, core inflation rose by 6.1 percent in the 12 months to September 2023, down from 6.2 percent in August.<\/p>\n The core inflation rate is the metric used to determine the impact of rising prices on consumer income. The\u00a0Bank of England\u00a0also takes this number – along with the CPI – into consideration when deciding whether to adjust the Base Rate.<\/p>\n We use your sign-up to provide content in ways you’ve consented to and to improve our understanding of you. This may include adverts from us and 3rd parties based on our understanding. You can unsubscribe at any time. More info<\/p>\n Stephen Perkins, managing director at Yellow Brick Mortgages said the drop in core inflation could give the Bank of England reason to maintain the Base Rate at its current level.<\/p>\n He said: \u201cThis would likely see continued small reductions in fixed rates, as lenders compete for the lack of business out there right now. However, there will not be any significant mortgage rate decreases unless there is an equally significant drop in the inflation figures. And that could not happen until next year.\u201d<\/p>\n Lea Karasavvas, managing director at Prolific Mortgage Finance added: \u201cSurprisingly, swap rates spiked a little following last month’s drop in inflation and Base Rate hold, but they have settled again over the past few weeks.<\/p>\n \u201cLenders have shown their hand by reducing rates significantly and with five-year money starting at around 4.73 percent, a further downward trajectory in inflation could stabilise the Base Rate and really allow lenders to fill up their diminished pipelines for 2024 by pricing even more aggressively and ending the year on a high.<\/p>\n \u201cIt\u2019s been a hugely unpredictable time in the money markets, but any downward movement could see some joy for borrowers as the year concludes, giving lenders renewed appetite to gain market share after a disappointing 2023.\u201d<\/p>\n
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